In metros across the nation, buyers are seeing steeper competition spurred by low inventory levels.
Redfin agents in Oakland, Seattle, San Francisco, Los Angeles, Denver and Austin saw large percentages of homes enter bidding wars in March, with the most extreme case being Oakland, where 84% of homes were at the center of a bidding war, according to the residential real estate company.
The trend is particularly concerning for first-time buyers, or those looking for more affordable homes. Redfin agent Andrew Vallejo, who serves the Greater Austin area, commented on the bidding war crisis in his market.
“The last two years—2014, 2015, and this year so far—have brought a lot of new listings at higher price points for the area, and a smaller amount of entry-level-price-point properties. Anything priced in the high $100,000s, $200,000s, even $300,000s, tends to be very competitive. We’ve seen some buyers make four, five, six offers and not win the bid, even if they’re going over list price, waiving contingencies, and trying to make their offers as sweet as possible.”
Unfortunately, there’s no sign of the competition letting up. According to Forbes, in March, the number of new listings for entry-level homes dropped 8% year-over-year in the 15 hottest urban markets: Atlanta, Austin, Baltimore, Boston, Chicago, Denver, Los Angeles, Oakland, Orange County, Calif.; Phoenix, Portland, Ore.; San Diego, San Francisco, Seattle, and Washington, D.C.. These areas added 26,800 new listings priced $230,000 or lower in March. In such an environment, sharp negotiation skills and expert handling of competing offers are key.
Read more about current inventory levels and bidding war struggles here.