Redfin: Bidding Wars Edge Up in September, Bucking Seasonal Trend

Redfin, Seattle, said just 11 percent of offers written by its agents on behalf of their home buying customers faced a bidding war in September, down from 41 percent a year earlier, but up slightly from the eight-year low of 10 percent in August.

The report said over the previous four years, the bidding war rate has averaged an 0.8 point drop from August to September, so even a small uptick is “unusual,” said Redfin Chief Economist Daryl Fairweather.

Redfin said according to seasonal patterns of homebuying competition from 2013 to 2018, the national bidding war rate falls an average of 15 percentage points from March (peak) to September. This year, however, the seasonal decline has been far less pronounced, falling by just 4 points during the same period. Fairweather noted the market this year never got very competitive in the spring the way it typically does, so there wasn’t much of a spring peak from which to decline.

“After the coolest spring home-selling season in at least eight years, homebuying competition didn’t have far to fall, but low mortgage rates ultimately drove a modest uptick in bidding wars in late summer when they typically become less common,” Fairweather said.

The report said in San Francisco, the most competitive metro in the nation, 28 percent of Redfin offers faced a bidding war last month, well down from 69 percent a year earlier. In nearby San Jose, 18 percent of offers faced competition in September, down from 83 percent a year earlier.

“More sellers are pricing their homes a little below the price they expect to sell at, which is encouraging bidding wars to drive up price,” said Redfin San Jose agent Kimberly Douglas. “In addition to teaser pricing like this, I’ve seen very aggressive price drops happening more often lately.”

Las Vegas and Phoenix tied as the second-most competitive metros with 21 percent of offers facing competition in both metros. No other metro area saw more than one in five offers face competition in September. The least competitive market in September was Miami, where just 2 percent of the offers submitted by Redfin agents faced competition. Dallas (3.1%) and Austin (3.6%) were the second and third-least competitive.