It is no brand-new headline that real estate all across the country has been in a strong seller’s market for over a year. Many homes saw bidding wars as there were many more buyers interested in homes than available homes for sale. The frequency of bidding wars on homes has dropped to its lowest level this year however and could be a sign that the housing market is beginning to cool and get back to its usual seasonal patterns.
A recent report compiled by the large real estate website Redfin has shown that 58.8% of the offers on homes written by their real estate agents saw strong competition in the month of August 2021. This number is down from 62.1% in the previous month and significantly down from the high peak number at 74.3% of offers facing competition in April 2021. Redfin states that they define a bidding war as any real estate purchase situation where there are at least two competing offers on the same home.
Current numbers are representing the lowest level of competition for homes since December 2020 when the bidding war rate was around 53.7%. The August 2021 numbers are also below the level posted for August 2020 which is another indicator that the real estate market is settling into its standard seasonal slowdown at the end of summer and into the beginning of fall.
Traditionally peak home-buying season starts in the spring and continues through the summer months as those seeking to purchase a home have more time to move in, especially young families with children hoping to move into a new home before the next school year begins. Last year due to the insanely competitive seller’s market and low inventory of homes as well as low mortgage rates encouraging and exciting buyers to look into the possibility of buying a home, the number of home offers and competitive offers did not decrease but increased.
Due to the beginning of the coronavirus pandemic in the spring of 2020, the real estate market took a huge slowdown in its typically most busy months as stay-at-home orders were strict all across the country. But shortly after, as things slowly came back to life and operation, the pandemic caused mortgage interest rates to drop to unbelievable lows and caused a record number of buyers to look for a new home that they would want to spend several hours a day in.
Suddenly several buyers found themselves wanting a home that they did not feel cramped or stuffy in or one where they could have plenty of outdoor space to themselves. The need for more and new space coupled with the ability to afford much more homes than before because of lower interest rates drove a real estate interest boom and began a highly competitive seller’s market all across the country.
The competition of several more buyers looking for homes and the record low number of homes for sale drove stiff competition in the real estate market all across the country, including areas surrounding Portland. This has also caused a large increase in home prices due to the high demand. Nearly every home for sale was seeing a bidding war with multiple offers. But in August the amount of homes in wars slowed down.
The number of bidding wars has slowed down a little bit, but real estate experts expect there to be a continued seller’s market for a significant amount of time into the foreseeable future. The best strategy a Portland home buyer can take is to hire the help of an experienced expert local agent.
For more information on real estate in Portland and the surrounding areas of Portland, please contact me anytime.