As eager real estate buyers and investors rush to take advantage of what may be their last shot at dirt-cheap prices, regional housing bubbles seem to be emerging in various markets across the United States. According to CNN Money and online real estate broker Redfin, housing markets in New England, California and South Florida are turning to seller’s markets with multiple bids on single properties.
According to Redfin, house hunters placed bids on 90 percent of all closings in Sacramento, San Francisco and various neighborhoods in Southern California during the month of March. A similar situation was observed in the Washington, D.C. metro area, New York and Seattle, where competing bids made up 75 percent of homes sold in March.
CNN Money cited a single listing in suburban Elk Grove in California, which received an astonishing 62 bids before selling at $150,000. Elk Grove was considered one of the fastest-growing cities in the U.S. a few years ago, but that distinction did not manage to curb the downward spiral of home prices that started in 2007. The home that received 62 bids initially listed for $129,000, a far cry from the $489,000 median prices reported by Trulia in 2006.
An even more astonishing real estate bidding battle was reported by Redfin in Cambridge, Massachusetts. Two condominium units that were marketed to sellers as an opportunity to combine them into a large property received 250 bids between the two. The winning bidder took both units for $2 million, a nice selling price that started at $800,000 for each unit.
The South Florida housing market is also home to bidding wars from Miami north to Palm Beach and west to the Tampa Bay. CNN Money interviewed a family that placed two unsuccessful bids; one was $5,000 higher than the listed price and the other was $10,000 on a short sale. The buyers then focused on real estate-owned properties, and they finally won a bid that actually closed lower than the asking price.
Southern California real estate agents are certainly enjoying the bidding wars, and they don’t seem to be concerned about looming new residential construction in the region. They are confident that builders are not moving fast enough to meet demand, and home prices are slated to keep rising as the bidding continues throughout 2013.