Bidding Wars Catch Buyers Off-Guard 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)