As the year approaches an end, a report from Redfin indicates America’s real estate bidding wars are easing as several factors including tightening supply continue to depress competition.
According to the company, 10% of purchasing offers made on its site faced a bidding war during the month. Not only is this percentage down from last year’s rate of 29%, but it also marks the fifth consecutive month the rate has hovered at a 10-year-low.
Even though the number of homes for sale has been falling faster than we normally see this time of year, Daryl Fairweather, Redfin’s chief economist, said buyers just aren’t feeling a sense of urgency right now.
“The supply and demand data still says that it’s a seller’s market, but homebuyers working with Redfin agents in places like Portland and Denver are feeling and acting like they’re in control,” Fairweather said. “Most of the homes that they are seeing are simply not worth getting into a bidding war over, so they’re more than willing to wait until the new year in the hopes that more homes will hit the market. “
The same can’t be said for homebuyers in San Francisco as the report determined the city was the only housing market to experience notable competition during the month.
In San Francisco, the bidding war rate was nearly 30% in November, down from 53% a year earlier. According to Redfin, November’s month-over-month decline of 3.7 points was slightly below the 2010 to 2018 average decline of 4.6 points.
“Almost every home for sale that is in a great location and priced competitively is still receiving multiple offers,” said Miriam Westberg, a Redfin agent. “One home we made an offer on last week had 25 other offers! However, homebuyers definitely feel like they can be more selective this year, so homes that don’t check every single box may only get a single offer and tend to take a longer time to sell.”
Although competition is still heating up in San Francisco’s housing market, Redfin notes its scarce everywhere else in the country, with no other market seeing a bidding war rate higher than 17% in November.
During the month, the bidding war rate hit its lowest point in at least five years in Chicago, Houston; Portland, Oregon, and Los Angeles. Redfin indicates Houston was the least competitive market, with just 1.4% of offers facing a bidding war in its housing market.
NOTE: Redfin’s analysis is based on home offer and purchase data gathered from thousands of Americans that bought homes with Redfin agents over the past five years.