Competition for homes on the market in November fell to what preliminary numbers show was the lowest point in almost a year, giving beleaguered buyers a little breathing room.
The share of houses with multiple bids dropped to 59.5% in November, suggesting that that number may have hit an 11-month low, according to Redfin. Preliminary numbers for previous months in 2021 have come in below 60% previously, but subsequent revisions have put them above that benchmark. In October, the revised number was 61.8%. Competition in the market was last this low in December of 2020, when the share of for-sale houses with more than one bid was 52.5%. A year ago, the share of homes with bidding wars was 55.9%.
With anecdotal accounts from real estate agents backing up indications of reduced buyer traffic amid the typically slow winter months approaching, Redfin expects the share of primary homes with multiple bids to remain relatively low, at least temporarily.
“We expect competition to continue to trend downward, mostly as a result of seasonality,” Taylor Marr, deputy chief economist at Redfin, said in an interview.
However, underlying demand remains historically strong, he noted.
As a result, declining competition may not have helped too much with affordability, according to Zillow. Home prices have continued to rise at an incremental rate with diminished deceleration seen recently, said Alexandra Lee, an economist at Zillow,
“Even with a bit of a cooldown in the last few months it does seem like we’re settling into a new hotter, normal for the winter,” she said in an interview.
What declining competition did do is give homebuyers a little more time to consider properties before they were snatched up, according to Zillow. The typical home took 12 days to sell in November, compared to 11 the previous month.
However, inventory is still historically tight relative to demand, and while housing starts have shown some relative strength recently they may not do much to alleviate that any time soon, Lee said.
“This rebound…is definitely good news for inventory, but it’ll be a while [before it makes a difference],” she said.
While the primary housing market cooled slightly in November, second homes heated up, according to Redfin. Demand was 83% above pre-pandemic levels during the period from 72% the previous month, but remained below January’s level of 91%, which marked a record high.
The Federal Housing Finance Agency’s reversal of a previous pullback on second-home loan purchases by Fannie Mae and Freddie Mac likely contributed to the uptick, Marr said. Continued remote-work, which has allowed buyers to spend more time in vacation homes, also likely helped to drive those sales.
