In a competitive market – where there are more home buyers than there are homes for sale – buyers often have to offer to pay more for a house than the seller is asking. By raising their offer, buyers better the odds that theirs will be the one chosen and they’ll get the house, rather than losing it to another buyer. In recent years, this type of bidding war has been common. And that competition between buyers was a primary factor pushing prices upward. However, according to a new analysis, last year was different. In fact, the number of homes that sold for an amount above the seller’s asking price fell to a three year low in 2019. Just 19.9 percent of homes sold above list price last year, which was lower than any year since 2016. Part of that was due to a housing market slowdown that returned things to a more normal pace. Inventory improved, the market was better balanced, and home price growth became more in line with historic norms. But, going into this year’s spring selling season, rising buyer demand and fewer homes for sale means interested buyers should be prepared for competition, as bidding wars may heat up once again. (source)
