The expected releases of several new IPOs have given the San Francisco housing market a jolt, as Redfin reports that 35% of offers written by Redfin agents in May faced a bidding war, which is up from just 5% in January.
While an increase, and higher than Redfin’s national average of 16%, it is still down from 77% from May 2018.
“Earlier this year, the San Francisco housing market appeared to be running out of gas, but the recent tech IPOs have reignited competition.” said Redfin Chief Economist Daryl Fairweather. “Buyers want to get in now before prices shoot up, while many would-be sellers are holding out for higher prices. With more people looking to buy homes than there are homes for sale, what you have is a recipe for bidding wars.”
Redfin states San Francisco was the most competitive metro in the nation in May, beating out San Diego (24%). San Francisco and San Diego were the only two metros that saw more than one-in-five offers face competition in May.
“We’ve seen as many as 33 offers on one property recently, and most offers have no contingencies or are all-cash offers substantially higher than the list price. A few recent buyers have been surprised by how much competition they faced when they submitted their first offer since they heard about the slowdown at the end of last year. But it just takes that one failed offer for most to realize what they are in for. It feels like early spring/summer 2018 again,” said San Francisco-area Redfin agent Miriam Westberg.
Miami, Florida, was the least competitive market, as just 1% of all offers in May faced competition, which is a drop from 5% in April and 33% in May 2018.
Raleigh-Durham, North Carolina (5%), and Dallas, Texas (6%), followed Miami as the least competitive markets. Raleigh saw a slight increase from 4% in April 2019.
Every major metro in the saw year-over-year declines, with San Jose, California, seeing a 67% decrease from May 2018 to just 16%.