A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.
From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.
“It’s a little surprising because we thought bidding wars were done with,” said Andy Aley, who is looking to buy his first home in Seattle’s Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.
Competitive bidding in the current environment isn’t producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump.
Comments from Bob Karp of Karp Properties LLC: We have yet to see wide-spread bidding wars in the Sierra Vista, Arizona housing market. However, we just had two offers on the same property on the same day after six months on the market with no activity at all! Our home inventory has not declined markedly because investors have not come in to scoop up foreclosures. The summer selling season is here in south east Arizona, so the next few months should be a good indication of emerging local market trends.