Competition for homes keeps falling

Fewer and fewer houses listed for sale are receiving multiple offers, real estate brokerage company Redfin reported, confirming what local agents are seeing as well.

Nationwide, 44.3% of home offers written by Redfin agents in July faced competition on a seasonally adjusted basis, compared with a revised rate of 50.9% in June and 63.8% in July 2021.

That’s the lowest share on record, with the exception of April 2020, when the market practically shut down because of COVID-19. It’s also the sixth straight monthly decline.

According to data submitted by Redfin’s agents, the typical home in a bidding war received 3.5 offers in July, down from 4.1 the previous month and 5.3 a year earlier.

Higher mortgage rates – now back over 5% for a 30-year, fixed-rate loan – and inflation are pricing some potential homebuyers out of the market, slowing activity.

As a result, while properties are often still selling quickly, 8% of listings each week experience a price cut, the highest share on record, Redfin said.

Of the metro areas analyzed by Redfin, however, Philadelphia had one of the busiest markets, with a 60.4% bidding-war rate in July, about the same as a year ago.

The cities with the lowest rates of homebuyer competition were Phoenix, 26.6%; Riverside, California, 31%; Seattle, 31.5%; Austin, Texas, 31.7; and Nashville, 33.3%.

In addition to Philadelphia, metros with the highest bidding-war rates were Raleigh, North Carolina, 63.8; Honolulu, 63%; Providence, Rhode Island, 60.5%; and Worcester, Massachusetts, 54.8%.

The city with the largest drop from July 2021 to July 2022 was Orlando, where listings with multiple offers fell from 81.4% to 37.4%.

Paula Wolf is a freelance writer