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The Wall Street Journal ran a lead story last week about how “stunned homebuyers find the bidding wars are back.”
In it, the newspaper recounted how the new trend has caught homebuyers off guard as they expected less competition in markets across the U.S. Locally, this trend dovetails with the reports I'm hearing from agents across Central Pennsylvania. Our training department just scheduled a special session on "handling multiple offers" for any agents rusty on the subject.
The renewed potential for multiple offers stems from reduced inventory levels, according to the Journal. They attempt to make a distinction from the scenario of competing bids that typified the "run-up" in the mid-2000s. My observation, however, is that this trend is merely a healthy market response to: A. Reduced supply, and B. increased demand.
Whether in 2005 or 2012, the existence of multiple offers indicates the current stock of homes is not sufficient for the homebuyers in the market. Definitely not rocket science. As the spring wears on, sellers agree to lower their prices, which in turn causes a bump in sales every year. This year, that effect might be particularly pronounced if there is an unleashing of pent-up demand after two years of tentativeness on the part of homebuyers.
I have yet to drill down into the actual sales data for this year on the subject; I'll likely wait until the second quarter is in the books before I do that. But, if the current crop of street-level gossip is true, we're experiencing some growing pains here in Central Pa.
For home sellers, good news. For homebuyers, not so much.
Have you experienced a multiple offer situation this year?
Jeff Geoghan is vice president of marketing and communications for Coldwell Banker Select Professionals and Select Services, based in Lancaster City, with 10 offices in eight Central Pennsylvania counties. Jeff lives in East Petersburg where he also serves as mayor. Jeff has been actively involved in local government and business and has been used as a source by local, regional and national publications.