Amidst a highly competitive market, homebuyers are pulling out all the stops when trying to purchase a home. The National Association of Realtors' Confidence Index Survey found buyers are using all-cash offers and putting down 20% or more for down payments in an attempt to score a home. Some buyers are not even attempting to place a bid on a property with multiple other offers. NAR notes this widens the wealth and income divide among those who are financially wealthy and those yet to build up wealth. In March, homes received an average of five offers, whereas homes only saw two offers on average in 2019 and 2020.
In the state of Utah, REALTORS® reported an average of seven offers per home sold. In Arizona, Georgia, New Hampshire, and Washington, there were six offers per home sold. And in California, Colorado, Tennessee, Texas, there were five offers per home sold.
In a highly competitive environment, buyers are increasingly turning to cash to make their offer more attractive. The share of cash sales has trended downwards since 2013, but it appears to be rising again, to 23% in March and to an average of 21% of sales in the first quarter of 2021, up from 18% in 2020.2
Buyers are offering cash to reduce the chance of a rejection. Of the cases reported by REALTORS® who had clients whose offer was not accepted, the presence of another bidder making an all-cash offer was the second largest cause their client's offer was not accepted, accounting for nearly 1 in 4 of unsuccessful offers. Other buyers making a higher offer is the major cause of rejections.
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