February 14th, 2018
The rate of bidding wars is on a sharp decline in markets across the country. In January, of all the offers written by Redfin real estate agents, only 13% actually had to go through a bidding war. Compare that to January of 2018 when that number was 53%, we can see that there’s been a massive drop in bidding wars so far this year, the reason being pretty simple: supply vs. demand.
As we’ve seen, inventory is finally starting to make somewhat of a comeback, giving home buyers a little more flexibility and purchasing power. Because the housing market is starting to slow down a bit, people looking to buy homes are actually in a position where they can be a little more picky on the house they end up with, even though sellers haven’t caught on to the market shift yet. One interesting point to make is that as inventory is rising, so are rates. And even though we’ve seen rates inching down over the past couple of months, many potential buyers have yet to re-launch their home searches, meaning there are now more homes with less buyers competing over them.
Loan officers and lenders need to be proactive when opportunities like this present themselves. Loan officers especially need to keep detailed records of their customers who are in the home searching process and let them know as soon as the market shifts in their favor, which it has. This could be the separator between having a terrific or a terrible spring.