The housing market in San Francisco tapped the brakes in June as just 28 percent of offers written by Redfin agents on behalf of their home-buying customers faced a bidding war. This was down from 65 percent a year earlier and 35 percent in May. The rate of bidding wars in San Francisco often declines after a busy spring market, and this year was no different. Nationally, just 12 percent of Redfin offers faced a bidding war in June, down from 52 percent a year earlier.
Despite the slight cooling, San Francisco was still the most competitive metro in the nation in June. San Diego (19%) and Boston (17%) were the next-most competitive metros. No other metro area saw more than one in six offers face competition in June.
“Bidding wars are still somewhat common in San Francisco, mostly at price points around $1 million, which is relatively inexpensive for the city, but enough to buy a modest house in a number of neighborhoods,” said Redfin San Francisco listing agent Chris Jurach. “Once you get above around $1.25 million, buyers are being more selective, leading to fewer bidding wars in those upper price ranges.”
“For the more expensive homes for sale, it’s really just the ‘perfect’ ones that are still seeing bidding wars,” explained Redfin San Francisco listing agent Gabrielle Bunker. “Homes that are not well-prepared and staged—even if they have only minor flaws like chips and dings in hardwood floors and walls—are not receiving multiple bids any more.”
Even as San Francisco saw more than a quarter of offers face bidding wars, just south in San Jose, only 6 percent of offers faced competition in June, down from 74 percent a year earlier. The rate also fell by 12 points from May to June—a bit more than the 9 point drop over the same period a year earlier.
“San Jose buyers have seen homes for sale staying on the market longer, and more sellers dropping prices than either of the last two years,” said Redfin San Jose agent Stella Phua. “When they see the market slowing down, they prefer to take a ‘wait and see’ approach. The only homes that are getting multiple offers now are the ones in the best locations, great condition, and priced lower than similar homes in the neighborhood.”
The least competitive market in June was Miami, where none of the offers submitted by Redfin agents faced competition. Dallas (5.3%) and San Jose (6.3%) were the second and third-least competitive.
But other early housing market indicators suggest that the cooling trend could soon reverse.
“With low mortgage interest rates luring more homebuyers off the sidelines as supply dwindles, we’re likely to see competition pick back up, especially for the most affordable homes and neighborhoods, where inventory is limited and buyers are most rate-sensitive,” said Redfin chief economist Daryl Fairweather. “At Redfin, we’ve been seeing increases in the numbers of homebuyers starting their searches and going on home tours following the latest mortgage rate drops.”
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.
