On Wednesday, May 20, Redfin (NASDAQ: RDFN) released new data that shows bidding wars are still common among real estate transactions in the U.S. In the four weeks leading up to May 10, more than 40% of Redfin offers saw multiple bids, according to the iBuyer platform.
In some markets, this multiple offer rate is as high as 60%, including in Boston, San Francisco, Fort Worth, and San Jose. Here are the 10 U.S. markets that saw the highest level of multiple offers on Redfin over the last four weeks:
- Boston, Massachusetts (63.3%).
- San Francisco, California (63%).
- Fort Worth, Texas (62.2%).
- San Jose, California (59.4%).
- Providence, Rhode Island (52.8%).
- Cleveland, Ohio (52.2%).
- Virginia Beach, Virginia (50%).
- Frederick, Maryland (49%).
- Worcester, Massachusetts (48.5%).
- Orlando, Florida (47.8%).
Redfin lead economist Taylor Marr noted, "Demand for homes has picked back up after hitting rock bottom in April, and that uptick paired with a lack of supply is a recipe for bidding wars."
At the bottom end of multiple offer rates were Tampa, Florida (16.7%), followed by Nashville, Tennessee (20.8%), Fort Lauderdale, Florida (21.7%), West Palm Beach, Florida (25%), and Lake County, Illinois (27.6%).
The price category that saw the most multiple offers (44%) were properties in the $300,000 to $400,000 range. Real estate type also made a difference, with single-family homes seeing 44% multiple offers, whereas condos and townhomes saw 39% and 33%, respectively.
Marr added, "Sellers are still holding off on listing their homes, partially due to economic uncertainty and concerns of health risks. In some hot neighborhoods, there may only be one or two homes for sale, with multiple homebuyers vying for them."
On the heels of a dramatic drop of new housing permits and completions, the housing supply crunch is likely driving the above trend. Low supply, fewer new listings due to the pandemic, and high demand are keeping seller's markets buoyed across the country.
In fact, last week the National Association of Realtors (NAR) reported that 96% of metros in the U.S. saw home price increases in the first quarter of 2020. With real estate traditionally being a lagging economic indicator, the downward pressure may still be forthcoming as real estate investors prepare for various recovery scenarios.