Home shoppers may be less likely to face a bidding war compared to a year ago. Just 15% of offers faced competition in April, according to an index by the real estate brokerage Redfin. That is down from 60% a year ago.
Even buyers in some of the hottest housing markets are reporting less competition this spring.
“Right now could be as good as it gets for buyers who want to avoid getting involved in bidding wars and price escalations,” says Daryl Fairweather, Redfin’s chief economist. “There are many forces at play that may lure buyers back and create more competition in the near future. Interest rates are low compared to last year, price growth has stalled and has even fallen in some West Coast markets, and wages are growing.”
San Francisco’s Bay Area remains the most likely market where buyers will face a bidding war. Twenty-two percent of offers in April there faced competition, which is still down significantly from 75% a year ago.
“Multiple billion-dollar San Francisco-based companies are going public this year, so I wouldn’t be surprised to see Bay Area bidding wars come back with a vengeance, pushing prices back up next year,” Fairweather says.
The next most competitive housing markets after San Francisco were Phoenix (20%) and San Diego (19%), according to Redfin’s index.
Overall, every metro area tracked by Redfin’s index saw a lower bidding war rate in April compared to a year ago. The least competitive housing markets in April were Miami (3%); Raleigh, N.C. (5%); Dallas (7%); Atlanta (7%); and Houston (7%).
Source: “Bidding Wars Slowly Heating Back Up in San Francisco—Nearly 1 in 4 Home-Purchase Offers Faced Competition in April,” Redfin (May 8, 2019)