Marketing Info

$800,000-plus home bidding wars escalate in US housing market

(Bloomberg) — Home buyers willing to spend nearly $1 million are most competing for a piece of the red-hot U.S. housing market.

According to December data from Redfin Corp, homes priced between $800,000 and $1 million had the highest bid rate of 64.6%, followed by 62% for homes between $1 million and $1.5 million and those over $1.5 million. were 61.7% for households.

“Buyers should anticipate that they may not win a home until their sixth or seventh bid,” Candace Evans, Redfin team manager in New York, said in a statement. “If you’re the type of person who falls in love with home, this isn’t your market.”

tug of war

The firm said Salt Lake City had the highest bid-warning rates of 37 US metropolitan areas analyzed, with 74 percent of offers facing competition in December. Tucson had a 73.1% bid-battle rate followed by San Diego with 71.1%.

Potential buyers are competing in the form of relatively cheap mortgage rates for homes and a proliferation of remote-working opportunities for homes in smaller cities in the wake of the Covid-19 pandemic fueling demand. The number of homes available in many of the hottest markets continues to decline.

It wasn’t just expensive homes for which the bidding wars were a factor in December. Redfin said more than 55% of offers for homes priced between $200,000 and $800,000 also faced competition.

The firm said that about 60% of domestic offers written by Redfin agents across the US faced competitive bids in December. It was the lowest rate in 12 months, but the pandemic-induced demand for housing remains strong as it grew 54% in December 2020.

Redfin said holiday homes, which are often expensive and have increased in popularity due to COVID-19, may have contributed to the bidding war in the high-end market. The firm said townhouses had a bid-battle rate of 62%, followed by single-family homes at 61.3%.

To contact the author of this story: Allison McNeely in New York [email protected]

© 2022 Bloomberg LP

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