Bidding War: Most Homes Will Get Multiple Offers in 2022: Zillow

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It’s been a brutal year for home buyers. The combination of increased demand and ongoing inventory shortages has fueled competition and led to double-digit price growth.

Here’s one number that sums up the challenges buyers face: By 2022, 48% of homes for sale received three or more offers, according to Zillow’s new Consumer Home Trends Report. Things weren’t much better during the hottest home buying days of 2021, when 40% of homes for sale received three or more offers.

By contrast, in 2018 and 2019, before the pandemic began to boost housing supply, only 29 percent of homes sold each year received three or more bids.

As more people compete for homes, prices rise – and homes become more out of reach for first-time home buyers. According to data from real estate brokerage Redfin, more than 55% of homes sold for more than their asking price in June.

The housing market is slowing, but buyers are still struggling

Thankfully for some, there are signs that the housing market is starting to cool down. Inventory is growing, sales are slowing, and some sellers are now willing to accept less to ensure their homes sell.

And the competition is getting easier. According to Redfin data released last month, the incidence of bidding wars has reached its lowest level since May 2020 in the early days of the coronavirus pandemic. Just under half of the offers written by the company’s agents faced a bidding war in June, compared with two-thirds of offers a year ago.

“Buyers who had to compete to win the race earlier this year can now spend their time touring their homes and perhaps wait to see if sellers have dropped their prices,” Redfin Chief Economist Daryl Fairwire said in a recent statement.

Of course, this only applies to buyers who can afford to buy a home. With mortgage rates up more than 5%, the cost of borrowing has increased compared to a year ago.

Those high monthly payments, combined with an imbalance in supply and demand that are still driving prices higher, mean many Americans will struggle to afford a home in the coming months.

“The historic lack of supply in the market, combined with continued demand, could create continued affordability problems for many Americans,” National Association of Realtors Chief Economist Lawrence Yun told lawmakers last week.

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More than money.

As the housing market cools, bidding wars are disappearing.

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