HOUSTON – (By Dale King, Realty News Report) – A seasonal chill has eased the intensity of residential bidding wars as the home-sales market typically slows during the year-end holidays.
A recent report from Redfin finds that cooler seasonal conditions have reduced the number of buyers competing for the same houses.
In November, 59.5 percent of offers written by Redfin agents encountered competition, the lowest level in 11 months, according to the company’s analysis. That rate fell from a revised 61.8 percent in October 2021 and from a pandemic peak of 74.6 percent in April 2021, though it remained slightly higher than the 57.3 percent recorded in November 2020.
While the housing market is still hotter than usual due to near-record-low mortgage rates and a persistent shortage of inventory, “homebuyer demand seems to be following a typical seasonal pattern by starting to slow as the year winds down,” said Redfin Chief Economist Daryl Fairweather.
“It’s normal for competition to ease in the winter months as more families take time off for the holidays,” Fairweather added. “While competitive bidding for homes waned in November, it was still higher than a year earlier, which suggests demand will remain strong heading into the new year.”
Across Texas, the cooling trend appeared in most major metros. Houston, Austin and San Antonio all ranked below the national Redfin average, while Dallas remained stronger. Redfin’s agents in Dallas faced bidding wars for 70.6 percent of listed properties in November, slightly down from 71.7 percent in October 2021 and well above the 45.8 percent that faced multiple offers in November 2020.
Houston’s November 2021 figure placed it 37th among the 44 U.S. metropolitan areas included in Redfin’s analysis. Offers were nearly evenly divided between those that faced competition—51.2 percent—and those that did not—48.8 percent. October’s rate was marginally higher at 52.6 percent, while November 2020’s rate was lower at 38.5 percent.
San Antonio ranked 29th among the 44 metros, with 55.7 percent of offers facing competition. That was nearly unchanged from October 2021’s 57.7 percent and comparable to November 2020’s 56.5 percent, indicating a steady pattern of bidding activity there.
Austin also showed stability: 57.6 percent of offers in November 2021 were multiple-offer situations, compared with 59.8 percent in October 2021. That rate was about 10 percentage points lower than November 2020’s 69.9 percent.
Nationally, the highest rate of bidding wars in November was in Richmond, Virginia, where 80 percent of offers faced competition, up from 69.7 percent in October. Salt Lake City followed at 73.8 percent, San Diego at 72 percent, and Honolulu and Dallas rounded out the top five with 71.1 percent and 70.6 percent, respectively.
“Bidding wars are still happening, but buyers are starting to get more breathing room,” said Jill Thompson, a Redfin agent in Indianapolis, where the bidding-war rate fell to 36.8 percent in November from 73.6 percent in October.
“A few months ago, the typical home was going for $15,000 to $20,000—sometimes even $50,000—over the asking price,” she said. “Buyers were paying cash, waiving inspection contingencies and overlooking needed repairs to win. Today, buyers are more cautious about overpaying, less willing to waive inspections, and less rushed to commit after the first tour.”
To be included in Redfin’s analysis, metros had to have at least 20 offers recorded by Redfin agents in both November 2021 and October 2021. The report was written by Hannah Tan and Alison Bentley of Redfin’s content marketing team.
Dec. 26, 2021 Realty News Report Copyright 2021
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