New Orleans real estate overbidding wars
There have always been some buyers willing to pay more than the list price in order to be sure they get the home of their dreams. But the last time I saw a buyer feeding frenzy like we’re seeing in 2021 was right after Katrina, when people were desperate for any place to live.
This market is different.
It’s been a perfect storm of low mortgage rates and rising prices. Throw in a worldwide pandemic that has people realizing they can work from home and their home ain’t all it’s cracked up to be and it’s a recipe for an out-of-control market. Inventory is low and competition for homes in the best condition is fierce. Bidding wars are common in the under $500,000 price range. (I can’t believe I even just said that)
Multiple offers are pouring in within hours of a good house hitting the market, some of them sight unseen.
Every bit of advice we would have given people even just a year ago has been thrown out of the window as buyers are waiving their rights to inspections and/or appraisals just to win the real estate overbidding war.
As a result, I thought we’d take a look at the number of homes being sold at or over the asking price and compare that to one year ago.
Whoa, Nelly. What a change.
|Homes sold over list price||193||386|
|Homes sold at list price||298||403|
|Average $ paid over list price||$8,738||$9,600|
|Median $ paid over list price||$5,000||$5,889|
The number of homes that sold for more than the list price DOUBLED in the last year, rising from 11.75% of total residential sales to 18.75%. Homes sold for full asking price increased from 18% of residential sales to almost 20%.
That means that in the last 6 months over 38% of the single-family homes and condos in New Orleans sold for the asking price or higher.
The good news is that 62% of homes sold for less than the listing price. The bad news is that many of those selling for less than the asking price were either in poor condition or in the luxury market, which typically has fewer buyers in our area.
I feel sorry for the buyers who are slugging it out every time a new house hits the market that’s even close to what they want. It’s a flurry of activity to get in and write an offer before anyone else – or at least before the listing agent has called for the highest and best offers to be presented by a deadline that’s probably tomorrow at 6:13 am. So many of you hurry, write your highest and best, and still get beat out by a cash offer. It’s frustrating, I know!
When there are 20 offers on one house and some of them are cash with no contingencies it’s hard to keep your spirits up and believe that you’ll find the right place.
Sellers and real estate overbidding
Sellers have their own fears, because they are selling at the top of the market, but also then becoming buyers in that same market. It creates a catch-22, because they are staying put until the market calms down, but until there is more inventory, it won’t.
I don’t have a solution to any of this. It’s just an observation of the current market, but the more you know, the better decisions you can make.