Redfin, the real estate brokerage built around the latest technology to help people buy and sell homes, found this November that bidding wars among its own agents and historically (substantiated with research from ATTOM Data Solutions) fell to its lowest level in 8 years.
On a national level in November 2018, 32% of offers to buy houses faced competition in bidding wars. Last year during this same month, 45% of offers to buy houses faced competition in bidding wars.
That being said, bidding wars remained hot and heavy in the country’s hottest markets.
“Winning a home” in Boston, still a highly sought-after location, requires that buyers “…make offers well over any asking price…” said Redfin agent Luke Kelly. “Proximity to Boston and local universities, coupled with highly rated schools in surrounding towns (Arlington Heights, Malden, Somerville and Cambridge areas) make these neighborhoods highly desirable.”
In the hottest neighborhoods in both San Francisco and Washington DC, 85% of the buyers have to deal with bidding wars. Even in the cooler, meaning less hot, neighborhoods in these two cities, 70% of buyers face competing bids.
Seattle, certainly one of the hottest markets has had the chilliest cool down. Only one zip code in Seattle induced 50% of Redfin offers to compete during the past three months. Whereas 75% of offers this Spring faced bidding wars, 20-25% of offers this November faced bidding wars.
Philadelphia’s housing market has seen competition heat up this year. Last November 2017, 30% of offers faced bidding wars; this November 2018, 36% of offers faced competition.
Meanwhile, purchase mortgages across all loan types during the last three months came in at its lowest reading for any Q4 since Fannie Mae began its Mortgage Lender Sentiment Survey in 2014. The same goes for refinance demand. All this while lenders continue to loosen lending standards.
Doug Duncan, senior vice president and chief economist with Fannie Mae, blames rising mortgage interest rates, tight inventory and “solid home price appreciation” for softened demand.
Despite the latest quarterly Mortgage Lender Sentiment Survey results, Duncan said he sees, “…continued strength in demographic conditions (the huge pool of prospective Millennial homebuyers just now coming of age to buy) and the labor market offer hope that conditions should stabilize and may even improve next year.”