Hopeful homebuyers looking to close the deal this spring should prepare for some serious competition.
In February, 68.8% of offers written by Redfin agents faced competition in the form of a bidding war. That's the highest level since the brokerage started tracking this metric in April 2020, and it's up from 60.2% in February 2021.
Redfin defines a bidding war as an offer that encounters at least one competing bid. Buyers have always had to worry about competing with multiple offers for desirable homes in hot markets, and bidding wars have become more common since the pandemic caused housing demand to surge.
“It’s the most competitive time in history to purchase a home because mortgage rates are rising from historic lows amid a worsening supply shortage,” Redfin Chief Economist Daryl Fairweather said in a statement.
Rising rates mean that prospective buyers are eager to lock in their mortgages soon to get the lowest monthly payments possible. And historically low inventory levels mean there are far more people who want to buy homes than there are houses for sale.
It's the perfect recipe for an ultra-competitive housing market and record-breaking prices — at least for now. Fairweather predicts that “some buyers will move to the sidelines” as rates continue to rise.
Bidding wars: Most competitive cities to buy a house
Some cities are more competitive than others in terms of home listings attracting bidding wars. Redfin found that El Paso, Texas, was the most competitive real estate market in February, with 87.5% of offers facing competition. Denver was next on the list with 83% of offers involved in a bidding war, followed by Minneapolis at 81.1%.
Greensboro, North Carolina, was the least competitive city in Redfin’s analysis, with just under 26% of offers facing at least one competing bid in February.
Here are the 10 cities with the largest share of offers facing bidding wars in February, according to Redfin.
- El Paso, Texas: 87.5%
- Denver, Colorado: 83%
- Minneapolis, Minnesota: 81.1%
- Raleigh, North Carolina: 80%
- San Francisco and San Jose, California: 79.9%
- Colorado Springs, Colorado: 79.5%
- Spokane, Washington: 79.2%
- Seattle, Washington: 78.9%
- Sacramento, California: 78.8%
- Boston, Massachusetts: 78.6%
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