Record tight inventories are making it increasingly difficult for growing numbers of buyers, who are creating multiple bid environments in markets that haven’t seen buyers battle over homes in six years.
Buyers are back but sellers aren’t, especially in Western markets recovering from large volumes of foreclosures. The result is that inventories are still tightening as the spring buying season ends. Buyers are fighting over what’s available, often to the benefit of those sellers who took a risk in this year’s evolving marketplace.
Prices are reported to be on the uptrend with 62 percent of Realtors reporting constant or increasing prices compared to the same time a year ago in the National Association of Realtors’ Realtor Confidence Index for May29 -June 8, 2012 that was released yesterday.
Buyer demand is reported to be growing faster than supply, and many Realtors are reporting multiple offers. However, buyer foot traffic slowed in May compared to last year, perhaps as buyers grew discouraged by slim pickings.
However, buyer traffic is still well above the moderate level, but seller traffic is flat, according to the NAR survey. First time home buyers accounted for 34 percent of total buyers. Normally first-time buyers are in the neighborhood of 40 percent of total residential sales, according to NAR’s Profile of Home Buyers and Sellers.
A majority of the 145 markets monitored by NAR Research experienced slower foot traffic in May of this year relative to the same time in 2011. The data, provided by SentriLock, LLC., is based on the total number of visits to properties as recorded on electronic clock boxes. Foot traffic was lower over the 12 months ending in May in 60 percent of the markets, while 35 percent expanded and 5 percent were unchanged. This moderating pattern suggests a broad based decline in the late spring following an equally broad-based expansion in the last spring/summer of 2011 and early spring of this year
Multiple bids are changing the playing field in a number of markets this spring and summer. Many agents new to the business who have little experience with them are dealing with a sudden and unexpected competition for homes brought about by inventors more than 20 percent below those of a year ago.
“Remember the “Roaring 90’s”….. Those days when you could list your house on Friday and on Saturday people would be parked in your driveway writing offers and good faith checks on the hood of their cars? Multiple offers were the norm and offered sellers a generous selection of offers from which to choose. Believe it or not we are experiencing a trend toward multiple offers even in this still difficult market and there is evidence that this trend will continue as buyers compete in a market with limited inventory,” reported Realtor Noel Crider of Auburn, CA on the Active Rain blog.
“The Phoenix Metro Area Housing Market faces multiple offers even in the higher end and luxury market as buyers try to snag homes before the market rises further. We have seen multiple offers for quite some time in the lower price ranges, but now as the market is returning, and returning strong, we are seeing multiple offers in the higher price ranges. We are now seeing multiple offers on homes in the move up and luxury home market. We are seeing offers that are $50,000 over asking that are not the winning bid. This is causing quite a bit of frustration as buyers are trying to get into a home before the market prices go up further,” reported Brenda & Ron Cunningham of Phoenix Metro Homes for Sale.
In Seattle, multiple offers on beginner houses in Seattle are common again reports Phil Leng of Kirkland, WA and in Austin, broker Gwynn Teal Carpenter reports, “It’s happened again! We are in one of those real estate markets where we are seeing homes with multiple offers. In Austin Texas, the market is so sizzling hot that it isn’t unusual to have more than 2 offers on a fantastic priced and conditioned home.
Even in Tulsa, a market that experienced neither the housing boom nor the bust, buyers are “scratching their heads because a Tulsa home for sale with which they fell in love wound up in a multiple offer situation – while we are in a Buyer’s market!!! How could this happen?? Any area with more than a six month inventory of homes for sale is considered to be a buyer’s market. But, just as the prettier girls get asked to dance before the less attractive gals, the same goes with Tulsa homes for sale. The more attractive and updated homes will receive offers quickly, while the less attractive homes will remain on the market,” said Lori Cain or Midtown Tulsa Real Estate.