In Atlanta, some buyers are trying to win bidding wars by writing personal letters and even offering sellers gifts of as much as $2,000 just for accepting their offer, said Andrew Kolodey, a Redfin agent in the city.
The boom threatens to extinguish itself with soaring prices pushing homes out of reach for would-be buyers, especially as mortgage rates rise off record lows. Inventory might also grow after the pandemic subsides because Americans who postponed moves could decide to put homes on the market.
For now, demand is surging practically everywhere. For the first time ever, the average U.S. home is selling for above its list price, Redfin data show. In Austin, Texas, possibly the hottest market thanks to a flood of transplants from expensive areas like Northern California, homes sell for 107% of asking prices.
Of 429 large counties measured by Redfin, 310 saw median prices jump at least 10% in February from a year earlier. Only 17 had declines, including the counties that comprise San Francisco and the biggest outlier of them all, Manhattan. The pandemic badly damaged the New York market—yet competition in the suburbs is stiff.
Buyers from New York and California who are getting the green light from employers to work remotely are bidding up prices in cheaper cities such as Atlanta, Dallas and Grand Rapids, Michigan. Suburban areas also are thriving as some companies adopt hybrid models that enable people to live in far-flung regions while commuting to urban centers a few times a week.
Feeling confined in their Washington, D.C., townhouse, Lauren Ayers and her husband decided to find a bigger place in the suburbs with a yard so they can adopt a dog and have room for family to visit. Ayers, who works for the federal government, says the opportunity was hard to pass up, with rates low and her employer signaling that flexible work options weren’t going away anytime soon.
But the hunt for a house in the Maryland suburbs quickly proved frustrating. After visiting a dozen homes and losing out on one bid to an all-cash buyer, they took no chances when a house they loved came on the market in March. The couple sweetened the pot for the seller, waiving all contingencies and offering to let them live for free in the home for a month after closing.
The strategy worked. They bid over the $700,000 asking price and beat out more than a dozen other buyers, some of whom had higher offers, Ayers said.
“We had the most attractive offer with all the risk on ourselves,” she said. “Do I wish we paid less? Absolutely. That’s not the market we’re in.”
This article was provided by Bloomberg News.