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    What’s Going On with Bidding Wars?

    What’s Going On with Bidding Wars? | MyKCM

    In a strong seller’s market, like the one we have experienced over the past few years, bidding wars are common and expected. This makes sense! A seller’s market is defined as a market in which the inventory of homes for sale cannot satisfy the number of buyers who want to purchase a home.

    According to the Cambridge English Dictionarybidding wars occur when two or more parties repeatedly outbid each other as they compete to purchase something- in this case, a home.

    In some areas of the country, first-time buyers have been met with fierce competition throughout their experience. Some have been out-bid multiple times before finally winning a bid on a home to call their own.

    According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), there is currently a 3.7-month supply of homes for sale.

    With the current number of houses listed for sale and the level of demand from buyers, this means it would take 3.7 months for all the homes listed to sell if no additional listings came to market. Any supply number under a 6-month supply is considered a seller’s market. According to NAR, the housing market hasn’t had a 6-month supply of homes for sale since August 2012.

    Good News for Buyers

    A recent report shows that the percentage of houses sold including a bidding war before settling on a final price decreased from 53% in January of 2018 to 13% this year.

    One reason for the decline is an influx of homes being listed for sale. Even though the month’s supply number is not increasing, the number of homes for sale is. The chart below shows the year-over-year change in inventory over the last 12 months.

    What’s Going On with Bidding Wars? | MyKCM

    As you can see, the number of homes for sale has started to build over the last eight months. Prior to this reversal, inventory levels had fallen for 36 consecutive months when compared to the year before.

    Danielle Hale, realtor.com’s Chief Economist, gave some insight into why bidding wars are less common on a local level this year,

     

    “[Last year] you might have been the only listing in your neighborhood, and you could put your home up at a certain list price and you would likely see multiple offers at or above that list price. That tide is turning this year.

    It’s going to depend on what neighborhood you’re in, but we expect it to be more common this year that you won’t be the only listing.”

     

    Inventory in the luxury and premium markets (the top 25% of listings in an area by price), is increasing at a greater rate than the starter home market. As the choices buyers have continued to increase, the likelihood of a bidding war will decrease.

    Bottom Line

    If you are debating listing your house for sale this year in Novi, Northville, South Lyon, Plymouth or other surrounding communities here in South Eastern Michigan, you may not want to wait for additional competition as inventory continues to rise.

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    Jeff Duneske

    With over 20 years of real estate experience, a career volume of over $250 million, over 1,000 properties sold, Jeff Duneske, broker/ owner of Duneske Real Estate Advisors at Keller Williams Advantage, has a lot to be proud of. However, his greatest source of pride is his honor: Jeff has built his business — and thrived in the industry — by instilling his clients’ trust.“ I have always said that we meet our clients at the crossroads of life and change — that we can make a difference, earn their trust and help our clients during this change.” “Knowing that I have earned the trust of over 1,000 clients and the privilege of guiding them through one of life’s largest financial transactions to achieve the American Dream is by far the greatest reward of my business.” Jeff was born and raised in Novi and earned the distinguished rank of Eagle Scout when he was 15 years old. In 1996, Jeff graduated from Novi High School and The Oakland Fire Academy and was intent on becoming a full-time firefighter. After serving as an auxiliary firefighter and EMT in Novi and Walled Lake for several years and not landing a full-time position on the force, Jeff decided to shift gears and find another professional path where he could help people and began his real estate career in 2000. Having been the #1 agent or team at various brokerages over his career, as well as the #1 team at Keller Williams Advantage and the #4 team in the Michigan-Ohio region of Keller Williams International in 2019, Jeff has certainly demonstrated his drive to reach for the sky and his commitment to his clients. “We never rest on our laurels, and we’re always improving our current systems — and implementing new systems — to boost efficiency and assure stellar service.” Jeff, who has served on the Professional Standards Committee for the past nine years, embraces a strong mindset to persistently achieve his goals without compromising his morals, standards, or ethics for anyone or any transaction. “You must uphold your standards because if you don’t uphold them, you have no standards at all.” “I run my life and my business by The Golden Rule: Treat others the way you would like to be treated.” Jeff’s noble purpose — conducting his business with the highest morals, ethics, and standards — has led him to a successful real estate career. More importantly, his ethical and moral standards have enriched his life and the lives of others in immeasurable ways … and because Jeff does not waver, he will continue to lead with purpose, honor, and great promise.

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