Redfin: Bidding Wars at 8-Year Low; Inventories Up 5%

Redfin, Seattle, said 32 percent of offers written by Redfin agents on behalf of their home-buying customers faced one or more competing bids in November, down from 45 percent a year earlier, the lowest level since the company began tracking data in 2011.

Redfin also reported housing inventories rose by 5 percent in November, the fastest growth in three years, as home sales declined by 8 percent. The report said home prices posted sub-4 percent growth for the third consecutive month, rising by just 3.3 percent year over year to a median of $298,800.

“The tide has turned,” said Redfin Chief Economist Daryl Fairweather. “Sellers are now competing for buyers, but they haven’t all realized it yet. Sellers who have adjusted their price expectations downward are still finding plenty of willing buyers. Sellers holding out for high prices are contributing to declining home sales and growing inventories. We see few signs that buyers are likely to reward their patience.”

Redfin reported completed home sales fell faster than it has in over two years, down 8.3 percent from November 2017. Home sales declined in 65 of the 74 largest metro areas that Redfin tracks. The only metro areas that saw more than a 5 percent year-over-year increase in sales in November were New Orleans (9.4%), Tampa (7.2%), Long Island (7.1%) and Orlando (6.5%).

Homes for sale in November rose by 4.9 percent from a year earlier, the highest level of inventory growth since June 2015 and the eighth straight month that the year-over-year figure increased. However, the national figure masks a wide variation among individual metro areas, with inventory skyrocketing in places such as San Jose (123.2%), Seattle (96.5%) and Oakland (60.3%) but still falling fast in other areas such as Philadelphia (-24.0%), Camden (-19.8%) and New Orleans (-19.1%). The number of homes newly listed in November rose 0.3 percent year over year.

Redfin reported the typical home that sold in November went under contract in a median of 44 days, two days faster than last year. The report said some zip codes in fast-cooling coastal markets are still hotbeds for bidding wars. Topping the list of zip codes where the vast majority of offers Redfin agents wrote from September through November faced competition are 94602 (Oakmore, Glenview and Lincoln Highlands) in Oakland; 20009 (U Street Corridor, Adams Morgan, Columbia Heights and Shaw) in Washington, D.C.; and 92870 (Placentia) in Orange County, Calif., all with 85 percent or more of Redfin offers facing competition.

Redfin noted Seattle, one of the hottest markets in the past few years, has cooled off; during the spring selling season earlier this year three out of four offers in Seattle faced competition. As of November only about one of every five offers in the Seattle area faced competition, the lowest rate of Redfin’s largest markets. The only Seattle zip code where more than half of Redfin offers faced competition in the past three months was 98115, encompassing the Maple Leaf, Wedgwood and View Ridge neighborhoods.

Redfin reported Philadelphia was the only metro area where buyers faced significantly more competition in November than a year ago. “Philadelphia is one of the markets where inventory is shrinking and homes are selling faster and for more money,” the report said.