As Competition Increases, How Long Will Bidding Wars Last?
Bidding wars continue to heat up across the country as buyers scramble through low inventories and high competition to land a home during the pandemic. The real estate brokerage Redfin reports that more than half of its home offers—or 54%--faced competition in July—the third consecutive month.
Salt Lake City came in as the most competitive market, with 75% of offers encountering competition. Also, San Francisco and San Jose, Calif., saw a high level of multiple offers at 67% in July.
Home buyers may be wondering how long they will likely continue to face this heightened competition for properties. “Bidding wars may slow down if interest rates tick up again, which could happen if we get good news about a coronavirus vaccine or more clarity around the outcome of the upcoming U.S. presidential election,” says Darly Fairweather, Redfin’s chief economist. “At the same time, we may still be in the early innings of the pandemic migration wave. If coronavirus cases continue to climb, more employers will likely make flexible remote work policies standard procedure, which will drive further migration out of large, expansive cities.”
If that’s the case, bidding wars could gain even more traction in suburban areas and small towns, Fairweather says.
Singe-family homes are the most likely to see a bidding wars in July (56%), followed by townhouses (54%), according to Redfin’s data. In comparison, condos faced less competition at 42%.