Competition among buyers is hotting up, with a growing number of homeowners reporting bidding wars taking place across the country, a phenomenon that had all but disappeared during the worst days of the crash.
Andy Aley, a prospective home buyer in Seattle, told the Wall Street Journal that the revelation had taken him by surprise, saying: “It’s a little surprising because we thought bidding wars were done with.”
Having lodged a bid that was $23,000 above the asking price on a home he had identified earlier this year, Aley was stunned to find he had been outbid on the properly.
Industry analysts say that the emergence of bidding wars is catching a number of buyers off-guard, leaving many of them feeling frustrated, reports the WSJ.
Glenn Kelman, CEO of Redfin Corp., underscored the level of competitiveness buyers were facing:
“We’re writing a record number of offers, but we’re not seeing a record number of closings and that’s because it’s so competitive.”
So why are bidding wars hotting up all of a sudden?
The reason is that inventories are finally beginning to dry up in numerous markets across the nation – the resulting decrease in listed properties means that buyers are once again scrambling after the same homes.
One of the problems is that many sellers have grown fed up with the low value of homes these days, and are unwilling to sell their homes for significantly less than they originally paid for it, instead preferring to pull their homes off the market and wait things out.
In addition, a growing number of investors have made a significant dent on inventories, buying up homes in bulk.
According to the Wall Street News however, the bidding wars can only be a good thing, claiming they are yet more evidence that demand for housing is beginning to pick up.