Buyer Competition is Dwindling; Here’s How to Use it to Your Advantage
Homebuyers are in luck: it seems competition is waning, and it could mean more leverage as we head into the holiday season.
Of course, there’s still a shortage of housing inventory and plenty of demand in most major markets, but according to recent stats, competition isn’t nearly as stiff as it was in years past. In fact, according to Redfin, the share of buyers who faced a bidding war last month fell to its lowest point in a decade.
Only 10% of buyers found themselves in a bidding war in October 2019 – a sharp drop-off from the 39% share seen in 2018. The rate of bidding wars is even lower in some areas. In Miami, for example, just 1.6% of buyers faced a bidding war. In Dallas, it was just slightly higher at 3.4%.
So, what does lower competition mean for you as a homebuyer? Generally, it can mean:
- You have more room to negotiate. Since sellers don’t have as many options, they may be more willing to accept contingencies, include certain appliances, cover closing costs, or make other concessions to get their home off the market.
- You may get a cheaper home. By the same token, you might also get away with a lower offer in this environment — especially if the seller is looking to sell fast or move out before the holidays.
- You can take your time. There’s not as much of a rush when competition is light. You don’t need to submit an offer the same day a home is listed, and you can probably afford to see a few more properties before making your final decision.
Be careful about waiting too long, though. According to experts, the leverage may not last for long. As Redfin’s chief economist Daryl Fairweather explains, “Right now, there are fewer homes for sale than we usually see this time of year, and sales are picking up thanks in part to low mortgage interest rates. All of the pieces are in place for bidding wars to become more common and for the housing market to shift back toward the seller’s favor next year. Now may be the last chance in the foreseeable future for buyers to win a home without facing a bidding war.”
Thinking of Shopping for a Home?
If you want to take advantage of the low-competition environment, then make sure to get Approved to Move™ for your mortgage loan first. Approved to Move™ could give you a fully underwritten approval, as well as give sellers more confidence in your offers. Ready to get started? Get in touch with Embrace Home Loans today.