Just 15 percent of offers written by Redfin agents on behalf of their home-buying customers in April faced a bidding war, down from 60 percent in April 2018. After a dramatic decline in bidding wars between September and January, even buyers in last year’s hottest markets have been far less likely to face competition so far this spring.
“Right now could be as good as it gets for buyers who want to avoid getting involved in bidding wars and price escalations,” said Redfin chief economist Daryl Fairweather. “There are many forces at play that may lure buyers back and create more competition in the near future. Interest rates are low compared to last year, price growth has stalled and have even fallen in some West Coast markets, and wages are growing.”
The San Francisco Bay Area was still the most competitive metro in the nation in April, but even there, just 22 percent of offers faced competition, down from 75 percent a year earlier, but up from the January low of 17 percent.
Since January the rate of bidding wars has increased 5 points in the Bay Area, more than Seattle (1 point), San Diego (<1 point), Los Angeles (2 points) or Boston (2 points). Phoenix also saw a 5 point increase rate of bidding wars over that period.
“Multiple billion-dollar San Francisco-based companies are going public this year, so I wouldn’t be surprised to see Bay Area bidding wars come back with a vengeance, pushing prices back up by next year,” said Fairweather.
Although the market is far less competitive than it has been for the past seven years, Bay Area buyers should still be prepared for a bidding war on the most desirable homes.
“We are definitely starting to see multiple offers again,” said Redfin agent Saleem Buqeileh. “Most move-in ready single-family homes are receiving four or five offers, and homes that are priced well below nearby recent sales are frequently getting 10 or more offers.”
“In San Mateo even the condo market is heating back up,” added Redfin agent Ellie Kravets. “We’re frequently facing at least three to five competing offers, most of which have waived contingencies or are all cash.”
Phoenix (20%) and San Diego (19%) were the next-most competitive housing markets after San Francisco in April. Phoenix has not historically been a very competitive market, but as one of the top migration destinations for the past few years, the market there is starting to heat up. To put the current market into context, every metro area had a lower bidding war rate in April 2019 than the 32 percent posted in April 2018 by the least competitive market—Miami.
The least competitive housing markets in April were Miami (3%), Raleigh (5%), Dallas (7%), Atlanta (7%) and Houston (7%). A year ago, these markets saw 32 to 61 percent of Redfin offers face competition.
The rate of bidding wars has fallen by at least 22 percentage points from a year ago in every large market that Redfin agents serve. The largest percentage-point declines in April compared to a year earlier were posted in Seattle (-57 points), Boston (-57 points) and Los Angeles (-56 points). The smallest declines were in Phoenix (-22 points), Chicago ( -23 points) and Miami (-25 points).
The table above indicates the bidding war rates for each of the largest metro areas Redfin agents serve.
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.
