(NEXSTAR) — The pandemic may be easing, but the real estate market is hotter than ever. As more Americans compete to own a limited number of homes, bidding wars are becoming a normal part of the home buying experience.
A bidding war occurs when multiple potential buyers are interested in a property, so the parties make increasingly higher offers in an attempt to secure the purchase.
It’s a trend potential homeowners are familiar with in tight markets like San Francisco or Austin, but as the pandemic moves many wealthy workers elsewhere, bidding wars are becoming more common in places that are fair or here. There used to be even sleepy real estate markets.
According to Redfin’s analysis, the eastern Washington city of Spokane saw the highest rate of bidding wars. In January, 83% of home sales included multiple competing offers — up from 61% from a year earlier.
“People across the country flocked to the housing market in January to get ahead of rising mortgage rates,” explained Daryl Fairweather, Redfin’s chief economist. “And there was very little listing available to everyone who came to the market because most sellers wait until late spring to list. So there was a lot of demand coming before there was too much supply.”
That, folks, is a recipe for a bidding war.
According to analysis by Redfin, the metro areas with the highest bidding rates in real estate transactions:
- Spokane, Wash. (83.3%)
- Sacramento, Calif. (80.4%)
- Seattle (79.7%)
- Dallas (78.1%)
- San Francisco/San Jose (76.5%)
- Denver (75.8%)
- Austin, Texas (75.6%)
- Virginia Beach, VA (75%)
- Raleigh, NC (75%)
- Boston (74.8%)
- Salt Lake City (74.7%)
- Portland, Ore (74.4%)
- Colorado Springs, Colo. (73.7%)
- San Diego (73.7%)
- Philadelphia (72.9%)
As competition intensifies in the cities listed above, potential buyers may turn elsewhere, therefore increasing competition and bringing the bidding battle to new territories. San Antonio, Texas, for example, is becoming a popular real estate destination for those fleeing price hikes in Austin, Fairweather said.
She hoped the same trend could follow in more affordable Florida cities like Tampa and Cape Coral.
The percentages listed above indicate the share of proposals that were part of a bidding war in January 2022. To make it on the list, Redfin said the metro area must file at least 20 proposals submitted by Redfin agents.
Check out the full analysis of the real estate site here.
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