New data from real estate brokerage Redfin revealed that despite the relative health of the U.S. housing market, bidding wars remained at a 10-year low this past November.
Only 10% of home-purchase offers written by Redfin agents faced a bidding war last month, down from 29% in the same month last year. For the fifth consecutive month, that rate is hovering at a decade-low and, according to Redfin, it’s likely to remain low through the end of this year.
“Even though the number of homes for sale has been falling faster than we normally see this time of year, buyers just aren’t feeling any sense of urgency right now,” Redfin chief economist Daryl Fairweather said. “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. 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.“
Indeed, Fairweather predicted that bidding wars will rebound in 2020, thanks to the favorable mortgage rate environment and ever-dwindling inventory. Last month, Fairweather said he expects about one in four offers to face other bids in 2020, compared to just one in 10 this year.
For now, however, competition stayed subdued nationwide. Of the markets tracked by Redfin, all but one saw a share of bidding wars that was higher than 17%. In places like Chicago, Houston, Los Angeles and Portland, Oregon, the bidding-war rate hit its lowest point in at least five years. Houston, in fact, was the least competitive market in November with a paltry 1.4% of offers facing a bidding war. Miami wasn’t far behind at 1.7%, while Raleigh, North Carolina, saw a similarly scant 2.6%.
The one metro bucking the trend? San Francisco, which stayed somewhat competitive with a bidding-war share of 30%, although that was down from 53% one year earlier and down from 34% this past October.
“Almost every home for sale that is in a great location and priced competitively is still receiving multiple offers,” San Francisco-based Redfin agent Miriam Westberg said. “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.”
