A new report from Redfin has revealed the most competitive markets in the US at the moment, with Salt Lake City claiming the top spot.
It's no secret that the US property market is not just hot but at a boiling point. Americans who have set out to buy homes during the coronavirus pandemic have grappled with relentless competition from surging homebuyer demand and the shortage of homes for sale. Bidding wars are so fierce that nearly half of homes are fetching more than their list prices.
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The most competitive US market 2021 - Salt Lake City
Salt Lake City had the highest April bidding-war rate of the 45 U.S. metropolitan areas in Redfin's analysis with 83.5 percent of offers facing competition. Following the Utah capital was San Diego and Spokane, WA, both at 83.3 percent. Boise and Phoenix rounded out the top five, with bidding-war rates of 81.8% and 80.5 percent, respectively.
However, it isn't just these five areas facing fierce competition, nearly three-quarters (72 percent) of the home offers written by Redfin agents in April faced competition, according to the report from Redfin. That's up from a revised rate of 66.7 percent in March and 44.9 percent in April 2020. However, the April 2020 bidding-war rate was impacted by pandemic stay-at-home orders that temporarily halted home buying and selling.
This situation is unlikely to improve anytime soon since we're now in the full swing of the spring homebuying season. 'Bidding wars are intensifying. In March, we were seeing three or four offers on a home. Now, we're sometimes seeing more than 20,' says Kristin Lopez, Boise, ID Redfin real estate agent
Of course, the return of seller confidence and the increased availability of better homes for sale is playing a part, Lopez explains: 'The homes for sale today are high-quality, desirable homes—a dynamic that's fuelling more competition. This is a contrast from the winter when most properties coming on the market were bottom-of-the-barrel homes. The difference is that today's sellers are folks who want to sell, whereas many sellers back in the winter had to sell and didn't have time to do any upgrades.'
The situation is so intense in areas such as Boise and Spokane that more and more affluent buyers are choosing to buy in cash to get ahead of the competition. 'Cash offers are on the rise in Boise, which means buyers without deep pockets are frequently getting outbid,' said Lopez. '
So many buyers are now coming in from outside the local metro areas that many can afford to become cash buyers.
'Cash is on the rise in part because there are more investors in the market, but also because there are a lot of families moving here from more expensive parts of the country,' she adds. 'Most buyers I work with are from out of state, and many of them have the cash to compete because they just sold their home in California or Seattle.'
Other metros that have had at least 20 offers recorded by Redfin agents in both April 2021 and March 2021 include Charlotte, Boston, Seattle, and Indianapolis. All of these cities have experienced bidding wars on over 70 percent of Redfin offers, and the numbers have increased between March and April, meaning the competition is getting tougher in these metro areas.
If you're looking at buying somewhere that will be less competitive, you should look Jacksonville, Florida, or Bakersfield, California – these popular areas are experiencing a decline in bidding wars.