As Seattle tops the country for home price growth for the seventh straight month, the local real estate market has gotten so competitive that it’s now nearly impossible to avoid a bidding war.
The monthly Case-Shiller home price index, released Tuesday, showed single-family home prices across the Seattle metro area in March increased 12.3 percent from a year prior – the fastest growth in more than three years.
The local price gains, again easily the largest of any major metro, were more than twice the national average of 5.8 percent.
Even compared to a month prior, Seattle-area prices rose 2.6 percent – also by far the fastest growth in the country and more than three times the national average.
There are simply far more interested buyers than homes for sale, and the imbalance is growing. That means when a house does come on the market, it can create a feeding frenzy.
New data from Redfin shows about 90 percent of houses for sale in the city of Seattle over the last two months wound up in a bidding war. That’s the most since records began at the start of this decade.
Seattle had the highest rate of bidding wars of any city Redfin tracks, which includes hot markets like San Francisco, Oakland, Los Angeles, Portland, Denver, Boston, Austin and Washington, D.C.
As the number of homes for sale keeps dropping to historic lows, bidding wars here have only increased. Three years ago, 71 percent of homes attracted multiple offers. At the beginning of the decade, less than half did.
All those extra offers often means prices go higher. The Redfin data shows nearly two-thirds of homes in Seattle sold for more than the list price in April, which is the highest rate since those records began at the start of the decade. The typical single-family house in the city last month sold for a record $722,000.
All those offers means more stress for home shoppers, too. Qualified buyers have said it can take six months to a year just to buy a house, largely because they keep losing to people who submit higher bids. The competition is at its fiercest this time of year as a majority of homebuyers come out for the real estate market’s peak spring season.
It’s not rare for a house to attract several offers – in some cases, a dozen or more offers can escalate the winning bid to more than $100,000 above the asking price. To stand out, some buyers have resorted to waiving contingencies and inspections, and submitting a bigger portion of their offer in nonrefundable cash sums.
And because houses can go so quickly, buyers often need to pull the trigger and submit an offer on a home within days – or even hours – of it hitting the market, which allows for less due diligence. There are even stories of buyers from outside the area submitting escalating bids on houses sight unseen.
Still, when houses on the market attract multiple bids, that doesn’t always result in an escalating price war. Often sellers will ask for offers all at once and simply pick the highest one, and shoppers who don’t get picked might not know how much they lost by or have a chance to counter-offer. And in about a third of cases in the Seattle market, the winning bid was still small enough to be at or below the list price.
The local real estate competition isn’t confined to the city of Seattle. Across the entire metro area, 79 percent of homes had multiple offers – though that was a smaller rate than the metro areas of Los Angeles and Oakland.
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