Jul 17, 2021

Bidding Wars To Purchase A Home Slowing Down

For the past six months since there has been so little inventory in many real estate markets, homes have been selling above list price as a result of bidding wars taking place.  There is now buyer fatigue and a little more inventory hitting the market so though still happening bidding wars are slowing down.  This is good news for first time home buyers in particular, who just can't compete with all cash offers and or high down payment offers.  Those making offers trying to buy a home with nothing down, or just 3% down were not even considered by sellers.   They have been out of luck. 

Money talks so all cash offers with no contingencies and a quick closing date are always at the head of line related to offers.  After those, people who can put 20% or more down would be given preference.  And, of course the deal always goes to the highest bidder all other things being equal.  This is what happens in a seller's market. 

But the tide will eventually turn.  If mortgage interest rates do back up, it will cool the real estate market.  When that happens we will see more inventory and prices will go down some; though since the country is short 5 million homes, this could take a few years.  In real estate, timing is everything.  It is always best to sell when there is a seller's market and buy when it is a buyer's market.  Unfortunately, things don't always work out that way for everybody.