Redfin: Bidding War Slide Continues
Redfin, Seattle, reported just 11 percent of offers nationwide faced a bidding war in July, down from more than 45 percent a year earlier, the lowest rate of bidding wars since at least 2011.
Redfin said the bidding war rate nationwided hasn’t surpassed 15 percent since November 2018, after falling steadily from a peak of 59 percent in March 2018.
“Mortgage rates have been mostly flat for the last month, and so has homebuyer competition, which was beginning a fast descent this time last year as mortgage rates were inching toward 5 percent,” said Redfin chief economist Daryl Fairweather.
On a local level, Fairweather said, “it’s noteworthy that some of 2018’s fiercely competitive markets–San Jose, Seattle, Los Angeles–have seen their bidding war rates plummet the most year over year. Home prices in these expensive markets have also been falling annually.”
The report said San Francisco was the most competitive market in July, with 35 percent of Redfin offers facing a bidding war. But that’s down from 72.4 percent a year earlier and up from 28 percent in June, mirroring the seven point increase seen from June to July of last year.
“Although the market isn’t as hot as it was last year, this spring and summer have been busy in San Francisco,” said San Francisco Redfin agent Miriam Westberg. “That’s partly because homebuyers are feeling pressure to move quickly due to the high-profile tech IPOs, whether that pressure is real or perceived. Low interest rates are also a factor in increased homebuyer interest since the beginning of the year. The market has definitely picked up since the winter and it seems like prices and competition are slowly heading back to mid-2018 levels.”
Redfin said San Diego was the second-most competitive market in July, with 21.3 percent of Redfin offers facing competition, followed by Boston (16.4%), Los Angeles (16%), Philadelphia (14.3%) and Denver (14%). The bidding war rate in San Jose was just 13.3 percent; in Seattle, the rate was only 7.8 percent.
Miami was the least competitive market in July, with just 1.3 percent of the offers submitted by Redfin agents facing competition. Miami was followed by Houston (4.8%), New York (6.3%), Dallas (6.6%) and Las Vegas (7.3%).
Fairweather said homebuyer demand should strengthen in the second half of the year as the housing market continues to stabilize, “but we may not see a big pop in bidding wars until early next year.”
The report can be accessed at https://www.redfin.com/blog/july-2019-real-estate-bidding-wars.
