Home sales are falling rapidly, causing bidding wars to dissipate rapidly, according to newly released findings from real estate brokerage firm Redfin.
In November, pending home sales fell 35.1% year-over-year on a seasonally adjusted basis. It was the biggest drop on Redfin’s record, since 2012.
The bidding war is also diminishing. The share of home deals written by Redfin agents facing competition in November was 40.4%, down 26.9 percentage points from the previous year.
In summarizing Redfin’s findings, Chen Zhao, Redfin’s head of economic research, said that while inflation is likely to fall slightly, it would be a mistake to think that housing will recover quickly:
“We anticipate that mortgage rates will fall a bit further in 2023 as the Fed continues to drive inflation down, which will eventually bring more homebuyers back into the market. However, we have a ways to go until we hit recovery mode, and we may see sales continue to ebb in the short term.”
Here are markets where bidding wars are disappearing faster than anywhere else.
The ranking is restricted to metros where Redfin agents submitted an average of at least 50 offers per month between March 2021 and March 2022.
10.Seattle
This section of Redfin’s listings in the metro faces competition:
- November 2022: 24.5%
- November 2021: 66%
As if those trying to sell their Seattle home didn’t have enough problems, here’s another one: This city is No. 1. 2 on the list of “10 Cities Where ‘Porch Pirates’ Are Most Likely to Steal Packages.”
Matthew Gardner, Seattle-based chief economist for Windermere Real Estate, recently told a local radio station that despite the current weak housing demand, he believes the lack of housing supply in the area means prices will start to rise again, “probably.” in the future. part of next year.”
9. Las Vegas
This section of Redfin’s listings in the metro faces competition:
- November 2022: 23.7%
- November 2021: 57.4%
Lee Barrett, future president of the Las Vegas Realtors Association, doesn’t believe the sudden cooling in the local housing market will turn into a crash.
As he recently told The Nevada Independent:
“The upward rate adjustment causes contraction, but it’s a natural contraction. There must always be changes in the real estate business. The sky is not falling. It’s just an adjustment.”
8. Miami
This section of Redfin’s listings in the metro faces competition:
- November 2022: 23.1%
- November 2021: 55.2%
Don’t mistake a falling bid war for increased affordability in Miami. Lack of inventory means it’s getting more expensive to buy or rent a house in the city.
As Florida Atlantic University finance professor Ken Johnson recently told the Miami Herald:
“We have a large number of Airbnbs that have taken long-term rentals out of the market and made them available for short-term rentals. A lot of them are switching back to long-term rentals because the rents are so high.”
6. Nashville (it)
This section of Redfin’s listings in the metro faces competition:
- November 2022: 22.2%
- November 2021: 61.5%
Inventory growth is accelerating in Nashville than anywhere else, according to a recent report from RE/MAX. Sales also fell sharply.
Jeff Checko, relocating director of Ashton Real Estate Group, told TV station Nashville that the strength of the economy and the direction of interest rates will determine what happens next:
“If tariffs remain in place, some doubts will persist. However, buyers will continue to accept the current situation and adopt several creative loan options offered by banks to spur activity. If inflation rises and short-term interest rates have to respond with more hikes, all bets are off.”
6. Houston (tied)
This section of Redfin’s listings in the metro faces competition:
- November 2022: 22.2%
- November 2021: 50.3%
A “storm of perfect market conditions” has seen home sales plunge by nearly 30% in Houston, according to Houston Public Media.
However, Jennifer Wauhob, chair of the Houston Association of Realtors, told the outlet that it’s important to keep a downturn in perspective:
“The sales numbers are so high, that when you compare now a 30% drop, but you remember you’re comparing it to a really abnormal year, then it’s not that scary.”
5. Riverside, California
This section of Redfin’s listings in the metro faces competition:
- November 2022: 20.5%
- November 2021: 47.6%
No one would think Riverside homes were cheap, at least when compared to values in other parts of the country. However, as prices dropped and competition faded, opportunities grew for some California buyers.
Last month, Oscar Wei, deputy chief economist for the California Association of Realtors, told a local TV station:
“Even in Southern California there are areas that are more affordable than others like Riverside, San Bernardino; the price might be a bit more affordable compared to LA, Orange County, and San Diego.”
3. Tampa, Florida (it)
This section of Redfin’s listings in the metro faces competition:
- November 2022: 16.7%
- November 2021: 59.3%
The housing market has cooled off in Tampa. It was one of the “10 Markets With the Most Canceled Home Sales.”
Want to buy your own house? Pop into the Money Talks News Solutions Center and look for a good mortgage rate.
3. Olympia, Washington (tied)
This section of Redfin’s listings in the metro faces competition:
- November 2022: 16.7%
- November 2021: 79.2%
In the fall, Olympia was named the 10th most expensive small town in terms of rent.
Perhaps the dramatic drop in bidding wars bodes well for those hoping the cost of buying or renting a home will get a little cheaper here.
2.Phoenix
This section of Redfin’s listings in the metro faces competition:
- November 2022: 16.6%
- November 2021: 51.8%
Residential activity has cooled dramatically in the desert. Andrea Crouch, president of Phoenix REALTORS, said prices were falling because of rising mortgage rates.
However, he saw no reason to panic. He told AZ Big Media that “the bottom is not going to fall off in any way. It’s just turned into a more normal market, which is fine.
1.Orlando, Florida
This section of Redfin’s listings in the metro faces competition:
- November 2022: 8.1%
- November 2021: 61.7%
Orlando – which had an average daily high of 74.2 degrees Fahrenheit last year – was recently named to the “Top 10 Best Warm and Sunny Places to Rest in the US” list.
With the bidding war almost gone here, you might have a better chance now to capture your own paradise.
How to win a bidding war
Even though the number of people competing for homes has decreased in many markets, there are still lots of properties making up for a lot of bidding.
If you’re planning to buy a home, prepare for a possible bidding war by studying the tips in “5 Ways to Beat the Hot Housing Competition.”
