In July, 60.1 percent of home offers written by Redfin agents faced competition, down from a revised rate of 66.5 percent in June and a pandemic peak of 74.1 percent in April, according to a recent Redfin report.
“Competition has started to slow in the last three weeks. We’re now seeing five to eight offers on homes instead of 25, and they’re coming in $5,000 to $10,000 above the listing price instead of $50,000 to $60,000,” Scott Mercer, a Redfin real estate agent in Sacramento, Calif., said in a release. “Buyers are pushing back. They’ve even started including appraisal contingencies again and making requests for repairs, things that were pretty much unheard of last year.”
Home prices are stabilizing amid an increase in housing supply. Increased supply gives buyers more options, which helps reduce competition, Redfin said. It’s also typical for competition to ease in the summer following the spring homebuying season, according to Redfin.
Fort Collins, Colo., had the highest bidding-war rate of the 47 metro areas analyzed by Redfin, with 77.3 percent of offers written by Redfin agents facing competition in July. Next came Orlando, Fla., at 77 percent; Nashville, Tenn., at 74.6 percent; Honolulu, Hawaii, at 74.1 percent; and Colorado Springs, Co., at 73.2 percent.
Sacramento, Calf., came in sixth place, with a bidding-war rate of 72.9 percent, down from 77.2 percent in June.
“A slowdown in the migration of tech workers from the Bay Area is the biggest factor driving the drop in competition in Sacramento,” Mercer said. “Sacramento exploded in popularity among remote workers during the pandemic. People coming from San Francisco were like kids in a candy store here because home prices were so inexpensive in comparison. But we’re no longer seeing as big of an influx of those folks, likely because families can finally travel again, and employers are asking people to come back to the office. It will be interesting to see if migration to Sacramento rebounds if the COVID situation continues to worsen.”