Buyer’s continue to overbid! Is low housing inventory driving prices up? (E7)

Overbidding on houses is contributing to the upward surge in prices due to the basic principles of supply and demand. As demand for housing increases, particularly in competitive real estate markets, buyers are willing to pay more than the asking price in order to secure their desired properties. This excess demand puts pressure on the limited housing supply, leading to a scarcity of available homes. Sellers, capitalizing on the heightened demand, often respond by setting higher asking prices to maximize their returns. Consequently, this cycle of overbidding drives prices up, making it increasingly challenging for potential buyers to afford homes and exacerbating the overall inflation in the housing market.