Home buyers are unexpectedly finding
more competition this spring in landing their dream home. Bidding wars
are increasingly being reported in markets across the country, from
California to Florida, The Wall Street Journal reports.
"It's a little surprising because we thought bidding wars were done
with," Andy Aley, a home shopper in Seattle, told The Wall Street
Journal. Aley says he was outbid on a home earlier this year, even
though he offered to pay $23,000 above the listing price and also waive
inspections and other closing conditions.
Home buyers are frustrated and caught off-guard about the bidding wars re-emerging, real estate professionals report.
"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," Glenn
Kelman, chief executive of Redfin Corp., told The Wall Street Journal.
Why are things getting so competitive? Many housing markets are
seeing a drastic decrease in the number of homes listed for-sale,
leaving home buyers with fewer options and more bidding on the same
house. Housing analysts say the shortage in supply is from sellers
unwilling to take much less for their home than what they originally
paid for it and pulling their homes off the market. Also, a surge in
investors has made the market more competitive, as investors snatch up
homes in bulk in all-cash deals.
“The bidding wars caused by tight inventory provide the latest
evidence that housing demand is starting to pick up after a
six-year-long slump,” The Wall Street Journal reports.
Indeed, the National Association of REALOTRS® reported late last week that pending home sales in March reached their highest level in nearly two years and are up 12.8 percent from a year ago.
Source: “Stunned Home Buyers Find the Bidding Wars Are Back,” The Wall Street Journal (April 27, 2012)