Bidding Wars Remain at 10-Year Low

Redfin, Seattle, reported just 9% of offers written by its agents on behalf of their home buying customers faced a bidding war nationwide in December, down from 12% a year earlier and setting another new 10-year low.

The report said as in November, San Francisco was the only market even moderately competitive in December. Despite this, the bidding war rate there in December fell to 26%, down from 35% a year earlier and down from 28% in November.

“There aren’t typically very many homes for sale in San Francisco in December,” said Redfin San Francisco Market Manager Saleem Buqeileh. “Last month we saw more buyers than usual out looking for a ‘steal’ and bidding on homes, which led to multiple offer situations on some homes where all of the buyers came in below list price, rather than above.”

Redfin Chief Economist Daryl Fairweather noted, however, that the bidding war rate is likely to begin rising again early this year as the real estate market heats up in the spring.

“Bidding war rates likely hit their true bottom in December,” Fairweather said. “Amid the current global economic uncertainty, mortgage rates will remain low in the coming months, which will boost demand for homes in 2020. That means more buyers competing against each other and bidding up prices.”

The report said competition remained rare everywhere else in the country in December, with no other market experiencing a bidding war rate higher than 17%. The bidding war rate fell to zero in Raleigh and Dallas and hit its lowest point in at least five years in Los Angeles. Aside from the zero rates in Raleigh and Dallas, Atlanta had the third-lowest bidding war rate in December at 4%.