Bidding wars have become the norm, but the bigger dilemma buyers face is how much higher the asking price will be in that competitive offer situation.
In Marin County, Calif., a recent listing for a 1,305-square-foot home with a single bathroom sparked an intense bidding war. The home was listed at $1.298 million. The real estate pro set a deadline for accepting offers and received 18 bids. The home sold for $2.057 million—58% over asking price, Liz McCarthy, the seller’s agent for the property, told The Mercury News. McCarthy also recently had a listing for a 107-year-old home in a flood zone that fetched nearly 45% over the list price after 147 showings and just seven days on the market.
More home buyers are waiving appraisals to ensure the sale doesn’t fall through, too.
According to a recent housing report from Redfin, half of all homes sold above asking price during four weeks ending on May 16. The median existing-home price for all housing types in April was $341,600—a record high, the National Association of REALTORS® reports.
Eighty-eight percent of the homes sold in April 2021 were on the market for less than a month, NAR’s latest data shows.
Buyer’s agents are growing frustrated with their house hunters who are unable to compete against the frenzy. “All my colleagues and I don’t love this market,” McCarthy told The Mercury News. “The poor buyers—I’m heartbroken for buyers. And it’s not fun writing offer after offer after offer for buyers who are bidding hundreds of thousands of dollars over asking—and getting beat out.”
The average number of offers REALTORS® reported receiving on a closed sale jumped to five in April, according to the National Association of REALTORS®’ latest “REALTORS® Confidence Index Survey,” a survey of more than 3,500 real estate pros about their latest transactions.
Real estate pros surveyed feel confident that home prices will continue to climb. On average, they expect home prices over the next three months to increase nearly 6% from a year ago. Here’s a state-to-state breakdown from the REALTORS® Confidence Index Survey of price expectations: