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Bidding Wars: Housing market has buyers competing for their dream home

"We just had clients that wrote an offer $130,000 over the list price."

ALEXANDRIA, Va. — Kelly Sobilo and her husband Jose Perez had big wedding plans in 2020. But when the pandemic hit, they put off their celebration and started house hunting instead.

"In May, we knew the wedding was on hold. We saw the interest rates dropping, so it was kind of on a whim," said Sobilo. 

Both were working from home indefinitely at the time. With competing conference calls, a dog and a 900 square foot apartment, they needed more space. The two were excited to take the leap into homeownership, but what they weren't prepared for was the competition waiting for them. 

"It felt like you were under the gun," said Perez. 

Shoshanna Tanner and her team at Compass Realty helped the couple in the search for their dream home. 

"In terms of buyer activity here, it went through the roof," said Tanner. 

Record low-interest rates and working from home motivated more people to buy. That essentially left the market with demand much higher than the supply. 

"It was already competitive, and this is just another level," said Elissa Laderach, part of Tanner's team. 

At the start of the pandemic, there was a short lull of inactivity, but it quickly picked up once people knew they weren't going back into the office anytime soon. 

"You think busy months are April, May, June and then it slows down in July. Last year, that was not the case at all. We stayed busy through now," said Caitlin Warren, another agent on Tanner's team.

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According to the online real estate market, Redfin, March 2021 was the hottest month in housing history. 42% of homes sold nationwide, sold above their list price.

"Nowadays you need to consider the list price as the opening big. It's almost like eBay," said Tanner. 

Many of those homes sold for much more than just a few thousand dollars above the list price.

"We just had clients that wrote an offer $130,000 over the list price. You may have to offer to pay the seller's closing costs, you may have to offer up your firstborn child. Do you want a puppy? People are doing all kinds of crazy stuff to get a leg up on other offers," said Tanner. 

Buyers are waiving home inspections, even appraisals. And by the time an open house has wrapped up, you may be up against 40 other offers. In the current market, it only takes hours for a home to sell. 

After several open houses and two offers, Kelly and Jose bought their dream home in Alexandria. 

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"You found us the house of our dreams and didn't give up on us. We have no regrets whatsoever. We are just so incredibly happy," said Sobilo. 

For others out there, also eager for the "American Dream" of homeownership, experts said patience is the key to getting there. 

At this point, it is unclear where the current real estate market is headed. Interest rates are expected to rise by the end of the year, so that will potentially stabilize the market. Especially since experts said home prices can only continue to go up so much until people are completely priced out. 

    

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