Home buyers may be facing less competition, but they are also finding fewer homes for sale.
In November, 59.5% of home offers written by Redfin real estate professionals reported facing competition, the lowest in 11 months, according to Redfin’s competition index. That’s a sharp drop from the 74.6% peak reached in April.
Make no mistake, bidding wars are still happening and buyers should still be prepared to face one. But the lessening in buyer competition lately appears to be following a more seasonal pattern for the housing market. “It’s typical for competition to ease in the winter months as more families take time off for the holidays,” says Daryl Fairweather, Redfin’s chief economist. “While competition waned in November, it was still higher than a year earlier, which is a sign that demand will be strong in the new year.”
The markets with the highest number of bidding wars in November, according to Redfin’s index, are Richmond, Va. (80% of offers faced a bidding war); Salt Lake City (73.8%); San Diego (72%); Honolulu (71.1%); and Dallas (70.6%).
Many buyers are still losing out to the competition during their home search. REALTORS® report that on average, their buyer clients have made two prior unsuccessful offers on a home, according to the REALTORS® Confidence Index Survey from October, the latest available. Forty-two percent of offers are above the list price, lower than 55% in June this year, NAR’s report notes.
The following chart from October’s REALTORS® Confidence Index Survey shows the average number of offers received on sold homes.