Home sales have improved a bit, but many buyers remain cautious about wading into the market, according to newly released findings from real estate brokerage firm Redfin.
In January, pending home sales rose 0.5% from a month earlier. However, they fell by 29.4% year over year on a seasonally adjusted basis.
Bidding wars also are on the wane. The share of home offers written by Redfin agents that faced competition in January was 42.1%, down from 68% a year earlier.
In a summary of Redfin’s findings, Taylor Marr, Redfin’s deputy chief economist, says that while some buyers are coming back into the market, many others remain shut out by a combination of higher mortgage rates and a limited supply of homes for sale.
“There were fewer new listings in January than at any point on record, with the exception of the start of the pandemic. That hampered demand because it meant that many of the buyers who were still in the market had a tough time finding a home that met their needs. The shortage of homes for sale also buoyed home prices.”
Following are the markets where bidding wars are disappearing faster than anywhere else.
The ranking was limited to metros in which Redfin agents submitted an average of at least 50 offers per month between March 2021 and March 2022.
10. Riverside, California
Redfin listings in this metro that faced competition in:
- January 2023: 33.9%
- January 2022: 56.9%
The housing market has cooled in Southern California, and potential homebuyers find themselves in a bind.
As Jack Liebersohn, an assistant professor of economics at the University of California, Irvine, told a local TV station:
“From the perspective of buyers, yes, prices are falling but interest rates are a lot higher, which makes it harder to buy a home.”
9. Houston
Redfin listings in this metro that faced competition in:
- January 2023: 30.5%
- January 2022: 56%
The market has slowed significantly in Houston, but homebuyers waiting for future dramatic price declines might be disappointed, says Thomas Mouton, chair-elect of the Houston Association of Realtors.
He tells Houston Public Media:
“If they’re going to wait around for the bottom to fall out, I don’t foresee that happening. You’ll probably have some one-offs, but for the most part, I don’t think they’re going to see the dramatic price drop that they assume they will.”
8. Colorado Springs, Colorado
Redfin listings in this metro that faced competition in:
- January 2023: 30.4%
- January 2022: 71.8%
Sales are tumbling and prices are going nowhere in Colorado Springs.
Homebuyers also will find a growing number of options, as the supply of homes for sale nearly tripled year over year in January.
7. Nashville
Redfin listings in this metro that faced competition in:
- January 2023: 29%
- January 2022: 56.6%
Bidding wars may have fallen in Nashville for now, but a change of tune could be on the way for Music City.
Nashville is one of “The Top 10 Housing Markets for 2023, According to Zillow.”
6. Austin, Texas
Redfin listings in this metro that faced competition in:
- January 2023: 28.7%
- January 2022: 76.5%
Prices are falling in Austin, but nearby areas such as Caldwell and Hays Counties recently have seen home values rise.
Ashley Jackson, 2023 president of the Austin Board of Realtors, tells CultureMap Austin:
“When we have a city like Austin challenged by affordability, the entry point in surrounding areas will slightly increase as people try and find neighborhoods they can afford.”
5. Raleigh, North Carolina
Redfin listings in this metro that faced competition in:
- January 2023: 26.5%
- January 2022: 73.8%
The housing market in Raleigh was red-hot at the beginning of 2022, but things have cooled considerably since then.
Still, sellers can find buyers when homes are priced right, according to Tony Fink, a licensed real estate agent with Linda Craft Team Realtors in Raleigh. He tells WRAL TechWire:
“Well-priced homes relative to the value they offer a new owner should still sell.”
4. Phoenix
Redfin listings in this metro that faced competition in:
- January 2023: 24.9%
- January 2022: 57.8%
Homeowners in Phoenix should batten down the hatches and prepare for a painful slide in the value of their homes.
No metro in the U.S. is expected to fare as poorly as Phoenix in 2023, as we recently reported in “5 Places Where Home Prices Will Plunge up to 18% This Year, Experts Say.”
3. Tampa, Florida
Redfin listings in this metro that faced competition in:
- January 2023: 22.9%
- January 2022: 69.1%
Tampa-based real estate investor Lee Kearney is quickly bowing to the reality of a slowing housing market, telling HousingWire that he is just “just trying to move inventory quickly.”
Kearney has lived through many real estate cycles, and he does not expect good times to return anytime soon. As he tells HousingWire:
“As a seller, if something is sitting out there a couple weeks and it’s not selling, the price is too high. There’s no good news around the corner. If you believe that statement, then the action item is to lower the price.”
2. Honolulu
Redfin listings in this metro that faced competition in:
- January 2023: 21.4%
- January 2022: 63.5%
After prices soared during the COVID-19 pandemic, Honolulu’s housing market is now “normalizing what happened in 2020 to 2022,” according to Ruthie Kaminskas, Realtor-associate with Corcoran Pacific Properties.
She tells a local TV station that the pandemic created a “frenzy” in Honolulu:
“It was an unprecedented amount of sales … we’re really not supposed to really experience anything like that more than once in our lifetime. And it’s just not something we can compare to. So, what I do when I’m talking to my buyers and sellers is I’m going back to when we were normal, which is 2019.”
1. Las Vegas
Redfin listings in this metro that faced competition in:
- January 2023: 17.4%
- January 2022: 58.7%
Competition for homes has evaporated in the desert of Las Vegas. In the summary of Redfin’s findings, Shay Stein, a Redfin real estate agent in the Las Vegas area, says:
“Nice homes that are priced fairly are selling, but homes that are overpriced or poorly maintained are lingering on the market. A lot of sellers who don’t get the price they had hoped for are taking their homes off the market. Many of them have a rock-bottom mortgage rate and figure they can wait to sell.”
How to win a bidding war
While the number of people competing for homes has fallen in many markets, there are still plenty of properties that generate multiple offers.
If you plan to buy a home, prepare for the possibility of a bidding war by learning the tips in “5 Ways to Beat the Hot Housing Competition.”
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