As a nation, bidding wars gained steam heading into the spring home-buying, with 61% of offers written by Redfin agents facing competition from other buyers in March.
While this is up 57% from February, it is down slightly from 63% in March 2014.
Then compare this to two of California’s, and the nation's, hottest housing markets.
Both San Francisco and Ventura County not only fail to follow the trend but also are surging higher.
San Francisco’s bidding wars are nearly at 100%, rising from 88% last year to 94%, with 32% of homes selling over the asking price.
Although, Ventura’s bidding war percentage is one of the lowest in California, it is one of the fastest growing, moving from 33% last year to 54%.
Also, 19% of houses sell for more than the asking price.
Dwight Johnston, chief economist for the California Credit Union League, previously spoke with HousingWire on how the solution for first time homebuyers, while maybe obvious, is to save. The California market is not changing anytime soon, and rather than hope for a change, buyers need to play to the system.
“The Bay area has a vast amount of money that is driving a lot of the competition, and there is no supply in the market at all,” Johnston said about these new numbers. “The more desirable areas are built out, and they are all competing for the same houses at the same time. They have so much money that they don’t have to worry about being rational.”
“In Ventura, except for the fact it is one of the coastal communities, it usually doesn’t get quite that amount of traction. Anything that is coastal or has any special allure to it, you will see some bidding wars. This is what California has become,” he continued.
So what’s fueling the San Francisco’s housing market?
The tech bubble.
Since the tech industry continues to grow, Johnston explained that people can afford the expensive houses there, and as a result, builders will keep constructing nicer homes.
“In the coast areas of California, builders want to get the maximum square reach because it is so expensive to build here,” he said. “And you can’t blame them.”
Johnston explained it’s only if and when the tech bubble starts to stop being inflated that market might cool down.