In suburbs across the country, homebuyers and brokers are seeing stiff competition in the home buying process. Historically low inventory and lots of people on the move has for sale homes in bidding wars now more than ever.
In Chicago, 31.9% of Redfin offers faced bidding wars in January compared to 26.3% in December 2020. Until there’s more inventory, those bidding wars are likely to continue.
For the ninth month in a row, Redfin is reporting more than half the homes offered by their agents are facing competition at 56%. With the number of homes for sale at an all-time low, it’s no doubt this is the case and buyers need to be prepared.
“With so few new listings hitting the market, I expect bidding wars to become more common and involve even more potential buyers as we head into the spring homebuying season,” said Redfin Chief Economist Daryl Fairweather in a press release. “The best thing buyers can do is prepare: Prepare to see homes quickly as soon as they hit the market, prepare by talking to a lender and getting preapproved and prepare by talking to your agent about how much a home you like is worth so you can go into a bidding war with your strongest offer tactics, but know when to back away if the price escalates more than you’re willing to pay.”
Single-family homes had the highest bidding rate of any property type in January at 58.7% followed by townhouses at 54.8% and condos at 44.6%.
According to the report, nationwide homes priced between $800,000 and $1 million faced bidding wars last month at 65%. Homes priced between $1 million and $1.5 million facing competition came in at 61% and 60.9% of homes priced between $600,000 and $800,000 were also in bidding wars.
While homes priced under $200,000 were less likely to face competition, the report found they still had a bidding war rate of 42.5%. Homes priced between $200,000 and $300,000 had a bidding war rate of 48.4% and those priced from $300,000 to $400,000 were at 52.6%.