Many would-be homeowners may think they are going to an open house only to suddenly find themselves competing in an auction instead.
In cities across the U.S., bidding wars have broken out among those hoping to land a home, according to real estate brokerage Redfin.
In February, 68.6% of home offers Redfin agents wrote involved a bidding war, the highest percentage since the firm began tracking such numbers in April 2020. That number is seasonally adjusted, and when unadjusted, 71.4% of offers written in February were subject to a bidding war.
In some cities, the level of competition is particularly fierce. Following are the markets where homebuyers are most likely to be caught in a bidding war based on the percentage of Redfin offers that faced competition.
15. Kansas City, Missouri
Offers that faced competition in February 2022: 76.5%
Offers that faced competition one year prior: NA
As bidding wars have become more ferocious in Kansas City, some home shoppers have decided to wave the white flag. Rather than try their luck in the KC metro, they are heading about an hour west to Topeka, Kansas.
Unfortunately, that exodus has simply sent Topeka prices higher, and bidding wars also now are common there.
13. Tampa, Florida (tie)
Offers that faced competition in February 2022: 77.4%
Offers that faced competition one year prior: 58.1%
How hot is this market? About 16% of the homes sold in all of Florida during February were located in Tampa, making it the premier destination in the Sunshine State.
During the month, median sale prices in the city jumped about 28% compared with the previous year.
13. Austin, Texas (tie)
Offers that faced competition in February 2022: 77.4%
Offers that faced competition one year prior: 48.8%
It seems like everyone is moving to the capital of Texas these days. As we have reported, homebuyers are becoming increasingly frustrated with their inability to land a home.
One local real estate agent told Realtor.com that in Austin, buyers “put in nine offers, they go 15% over asking, and someone is always going over that.”
12. Palm Bay, Florida
Offers that faced competition in February 2022: 78.3%
Offers that faced competition one year prior: NA
Not only is it tough to get a home in this part of paradise, but rents in Palm Bay also are making life miserable. Last year, rental costs spiked by 24%, putting some seniors on the edge of homelessness.
11. Salt Lake City
Offers that faced competition in February 2022: 78.4%
Offers that faced competition one year prior: 94%
In December, Salt Lake City saw more bidding wars than anywhere else, with 74% of listings getting competitive offers.
The city no longer holds that infamous title, but competition for homes remains intense.
Late last year, real estate agent Dani Griffith told a local TV station that a shortage of inventory was driving prices higher. She said:
“We’ve got a huge inventory shortage here in Utah. We’ve got a whole lot of buyers and not enough sellers, so we are feeling the effects of pricing.”
10. Boston
Offers that faced competition in February 2022: 78.6%
Offers that faced competition one year prior: 67.7%
In Beantown, “bidding wars and waiving contingencies are now the rule, not the exception,” according to Boston 25 News.
Daryl Fairweather, chief economist at Redfin, recently told the news outlet that there are now 40% fewer homes for sale in Boston than there were a year ago.
9. Sacramento, California
Offers that faced competition in February 2022: 78.8%
Offers that faced competition one year prior: 63.6%
Like so many housing markets, Sacramento is on a tear. In February, the median price shot up $31,000, a 5.5% gain from the previous month.
For perspective, the market typically sees a gain of 2% to 3% for the entire year.
8. Seattle
Offers that faced competition in February 2022: 78.9%
Offers that faced competition one year prior: 76.1%
Although the Seattle market has been sizzling for a while, there are small signs that a change might be in the air.
The Seattle Times reports that local resident John Stevens listed his five-bedroom Tudor in the metro last month. He told the Times:
“I knew I wanted to take advantage of this pop in the market that wasn’t going to last.”
But instead of a bidding war, he received no offers — until a buyer finally purchased the home at the list price.
7. Spokane, Washington
Offers that faced competition in February 2022: 79.2%
Offers that faced competition one year prior: 83.3%
The New York Times reports that Spokane is the newest poster child for all that has gone wrong with the housing market. As people flee from overpriced big cities — think New York and Los Angeles — they land in Austin, Texas, and Portland, Oregon.
An influx of such residents causes prices to soar in these newly adopted hometowns, causing residents to flee to places like Spokane.
And the cycle starts over.
6. Colorado Springs, Colorado
Offers that faced competition in February 2022: 79.5%
Offers that faced competition one year prior: 82.9%
A recent headline in the The Colorado Springs Gazette says it all: “Home prices in Colorado Springs: Another month, another record high.”
Things are so out of control here that buyers typically include escalation clauses, stating how many thousands of dollars they are willing to go over the top bid.
As Patrick Muldoon, owner of property management company Muldoon Associates, told The Gazette:
“It’s 100% a seller’s market. The buyers just simply do not have a chance.”
5. San Francisco/San Jose, California
Offers that faced competition in February 2022: 79.9%
Offers that faced competition one year prior: 79.1%
This area of California has always been both expensive and highly desirable. But even by Bay Area standards, things are off the charts right now.
In 2021, nearly 73% of homes in San Francisco sold above the list price. Three homes in one ZIP code — 94116 — sold at nearly double the asking price.
4. Raleigh, North Carolina
Offers that faced competition in February 2022: 80%
Offers that faced competition one year prior: 69.1%
As we recently reported, Raleigh-area real estate agent Monique Edwards — who characterizes activity in her market as “absolutely insane” — posted a viral video showing hordes of people lined up to get into one open house.
For more on the country’s hottest markets, check out “12 Cities Where Home Values Have Jumped Over 40% Since the Pandemic Started.”
3. Minneapolis
Offers that faced competition in February 2022: 81.1%
Offers that faced competition one year prior: 69.7%
In often-cold Minneapolis, demand for homes couldn’t be hotter.
The situation is so intense for buyers that Twin Cities Habitat for Humanity recently published a guide for how to win a bidding war.
2. Denver
Offers that faced competition in February 2022: 83%
Offers that faced competition one year prior: 76.2%
After a decade of double-digit price increases, things finally may be stabilizing in Denver. Reports say that housing permits in the metro jumped 16% in 2021 — the highest number seen in five years — so more supply is coming to the market.
Still, it will take time for things to improve. For now, the bidding wars continue.
1. El Paso, Texas
Offers that faced competition in February 2022: 87.5%
Offers that faced competition one year prior: NA
There are plenty of bidders in this Lone Star State city.
In the Redfin press release, real estate agent Salvador Palos characterizes El Paso housing inventory as “ridiculously low.” Supply chain issues and labor shortages are choking the supply of new homes.
As a result, properties for sale in El Paso often get 10 to 15 offers and sell for $20,000 above the listing price, Palos says.
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