The demand for single-family homes has rapidly climbed in the past two years, as the coronavirus shut down encouraged people to look for more living space. The increased demand, limited by low inventory and encouraged by low interest rates led to home appreciation unlike anything we had seen before- until last month.
According to a recent Redfin report, homebuyer competition has fallen to it’s lowest level since the coronavirus shutdown. Redfin found that on a national basis, 44.3% of offers written by its agents were competing against other offers in July. In June, 50.9% of offers were competing against other offers, and 63.8% one year ago. In fact, July marks 6 straight months where buyer competition has lowered.
Raleigh, NC had the highest amount of competition, with 63.8% of offers facing competition. The lowest ranking metro area was Phoenix, AZ at 26.6%. The Charlotte market ranked 7 higher than Phoenix, at 34.6% of offers facing competition. Redfin marked it’s stats for 37 metro areas that it services.
In July, the typical bidding-war situation had 3.5 offers. In June it was 4.1, and a year ago it was 5.3.
While interest rates are eating into the purchase power of some, a lot of buyers are using these times as an opportunity to consider more options and negotiate for better terms.
As far as property types, Redfin noted that townhouses were the most common property type to receive multiple offers, with 43.5% of their offers facing some level of competition in July. Single family homes ranked second at 42.9%, then condos (39.7%) and multi-family properties (38.9%).