With housing inventories low and home values rising by double-digits over the past year, sellers are holding firm on the price they demand.
A recent survey by the real estate agent referral firm HomeLight has found that 52% of agents believe the biggest challenge sellers will face in 2021 is the temptation to overprice their homes due to the red hot market we’re in.
Home sellers are firmly in the driving seat amid rising prices and low inventory, and 15% of real estate pros surveyed by HomeLight said they were worried that bidding wars in 2021 will lead to more offers on homes that are above their appraised values.
Bidding wars have become commonplace in many markets. In December, almost half of Redfin’s agents reported that they’ve faced multiple bidders when submitting offers for their clients.
“The housing market is unseasonably hot. It’s behaving like it normally does in the spring, with plenty of demand from home buyers,” Daryl Fairweather, Redfin’s chief economist, said last week. “Typically, the vast majority of homes for sale in December are homes that have been sitting on the market because they’re overpriced or there’s a problem with the property. This December, with so many Americans moving, scores of desirable homes hit the market—but not enough to satisfy insatiable demand from homebuyers. The result? Fierce bidding wars.”
Redfin’s survey highlights that bidding wars are most prevalent in the Salt Lake City metro area, with 75.6% of all offers its agents submitted facing competition from other bidders. San Diego came second with 74.5%, followed by San Francisco/San Jose at 67.4%, Seattle at 65.3% and Denver at 58.4%.
Additionally, HomeLight’s survey found that the biggest challenge for home buyers in 2021 will be the lack of housing options due to low inventory, and the inability to find a home they like, cited by 51.4% of all agents. Almost 19% of agents said they were also concerned their clients might lose out on multiple homes this year due to higher bids, and 11% said their clients will struggle to find an affordable home this year.