Redfin agents reported that only 10% of the purchasing offers made on its website during November 2019 faced a bidding war. This 10% represents a drop of -19% from November 2018 levels when 29% of purchasing offers on Redfin’s website faced bidding wars. This 10% also represents the fifth consecutive month in which the level of bidding wars hovered at 10-year lows.
This reduction in bidding war activity comes at a time when inventory levels are also at historic lows. Usually, low inventories translate into higher prices or, at the very least, an uptick in bidding wars. Not this time, however.
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The reason for this reduction in bidding war activity is, according to Redfin’s chief economist, Daryl Fairweather, that homebuyers are “not feeling a sense of urgency to buy right now.” Why? “The supply and demand data still says that it’s a seller’s market but homebuyers working with Redfin agents in places like Portland OR and Denver are feeling and acting like they’re in control. Most of the houses 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 hopes that more homes will hit the market.”
Bidding wars are at the lowest levels in at least five years in cities such as Chicago, Houston, Los Angeles and Portland OR. In fact, Houston is the least competitive market in the country with only 1.4% of purchase offers facing bidding wars.
Only one city in the country experienced bidding wars at a higher rate of 17% during November 2019 and that city was the City By The Bay.
San Francisco’s rate of bidding wars in November 2019 was nearly 30%, down from 53% in November 2018. According to Miriam Westberg, a Redfin agent, said, “Almost every home for sale that is in a great location and priced competitively is still receiving multiple offers. 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.”
Thanks to HousingWire’s Alcynna Lloyd for source data.