Competition to Buy a Home Remains High
Competition for California homes is on the rise, and nearly half the properties selling today are generating multiple offers.
Trends from 2000-2011
This chart shows the percentage of properties with multiple offers for each year from 2000 through 2011.
2007 Was the Low Point
2007 had the lowest number of homes receiving multiple offers at a mere 27.7%. On average, three buyers competed for those homes.
The Best Year was 2009
2009 was actually the best year of the past decade, with 55.4% of properties attracting more than one bidder. In fact, the average number of bidders in 2009 was five!
The Current Trend
In 2010, 50.6% of the properties sold received multiple offers, with an average of four bidders each, and 2011 had 44.6% with multiple offers, also with an average of four bidders.
Not surprisingly, when the percentage of homes receiving multiple offers rises above 40%, the average number of buyer making those offers also rises to four and five.
From the looks of 2012 so far, we’re going to be setting a new record. We just sold a home in Sabre Springs with 10 offers and one in Escondido with 7 offers, and the phone is still ringing. The combination of low inventory and attractive interest rates are inspiring an encouraging number of buyers to make their move now, rather than waiting.
The Buyer’s Greatest Fear
A buyer’s greatest fear is paying too much for a home. After all the recent years that the media have proclaimed a Buyer’s Market, many home buyers find it difficult to pay more for a home than the recent sales support. Inevitably, when bidding wars force prices even slightly upward, a buyer has to realize that these sales become the newest closed sales, which inspire future sellers to reach a little higher.
We’ve learned over the past 28 years spent in this industry, that no matter which cycle the market is in, no one ever thinks it’s going to end. And it always does! Now, if we could just predict when and for how long, wouldn’t that be nice?