San Francisco, San Diego and Las Vegas were the most competitive housing markets in August, but local buyers were far less likely to face a bidding war than last summer.
Just 10.4 percent of offers written by Redfin agents on behalf of their homebuying customers faced a bidding war in August, down from more than 42 percent a year earlier. That overtakes last month’s 11.4 percent bidding-war rate as the lowest on record since at least 2011.
The national bidding war rate reached a high of 59 percent in March 2018, then started to drop as homebuyers reached their limit with sky-high housing prices and rising mortgage rates in the middle of last year. As the US housing market has cooled slightly, so has competition to purchase homes.
“Despite remaining near three-year lows, mortgage rates have failed to bring enough buyers to the market to rev up competition for homes this summer,” said Redfin chief economist Daryl Fairweather. “Recession fears have been enough to spook some would-be buyers from making the big financial commitment of a home purchase. But assuming a recession doesn’t arrive this fall or winter, consumers will likely adjust to the new ‘normal’ of continued volatility in the stock and global markets, and the people who need and want to make a move will take advantage of low mortgage rates. As a result, I still expect homebuying competition to pick back up in the new year.”
The San Francisco metro was the most competitive market in August, with 31 percent of offers written by Redfin agents on behalf of their homebuying customers facing a bidding war. But even though that’s more competitive than every other major market in the U.S., the local bidding war rate is down from 73.5 percent a year earlier and down slightly from 31.8 percent in July.
San Francisco is followed by fellow California metro San Diego, which saw an 18.4 percent bidding war rate. Then come Las Vegas (17.1%), Boston (15%) and Los Angeles (14.4%).
The rate in San Jose was 10.3 percent, down from 77 percent a year earlier, and in Seattle, another expensive West Coast metro, it was 9.4 percent, a big year-over-year dip from 37.8 percent in August 2018.
“Competition in the Seattle area has certainly slowed down since the second half of 2018. Last year, five out of five offers I submitted faced competition; now, it’s one in five,” said local Redfin agent Michelle Santos. “Now, for desirable homes, competition is still fierce, and the winning offer is one that’s above the list price and waives contingencies. At the same time, average homes sit on the market for quite some time before they get any offers.”
Atlanta led the pack of least competitive markets, with just 2.4 percent of the offers submitted by Redfin agents in August facing competition. It’s followed by Miami (3.1%), Raleigh (4.2%), Philadelphia (4.3%) and Chicago (5%).
Editor’s Note: Early in 2020 we discovered an issue with the data we had been collecting on bidding wars, which caused us to underestimate the rate of bidding wars in several markets. Redfin is currently in the process of fixing these data issues. Once complete, we will provide an updated estimate of the bidding wars for 2019.
