Redfin reports that only 10.4% of offers written by Redfin agents faced a bidding war in August—the lowest rate since 2011.
The bidding-war rate is also down annually more than 42%, and is a full percent lower than last month’s 11.4%.
According to Redfin, the national bidding-war rate reached a high of 59% in March 2018, but has gradually dropped as home prices and mortgages rose last year. Redfin states that as the housing market cooled, so has competition to purchase homes.
“Despite remaining near three-year lows, mortgage rates have failed to bring enough buyers to the market to rev up competition for homes this summer,” said Redfin Chief Economist Daryl Fairweather. “Recession fears have been enough to spook some would-be buyers from making the big financial commitment of a home purchase.
“But assuming a recession doesn’t arrive this fall or winter, consumers will likely adjust to the new ‘normal’ of continued volatility in the stock and global markets, and the people who need and want to make a move will take advantage of low mortgage rates. As a result, I still expect homebuying competition to pick back up in the new year.”
San Francisco, California, was the most competitive market in August, with 31% of offers facing competition. While it is the highest in the nation, that rate is down year-over-year from 73.5% and a slight drop from July’s 31.8%.
San Diego, California, followed with 18.4% offers facing a bidding war. Las Vegas, Nevada (17.1%); Boston, Massachusetts (15%); and Los Angeles, California (14.4%) were also among the most competitive.
San Jose, California, saw the largest annual drop, falling from 77% last August to 10.3%. Seattle, Washington, saw its rate fall to 9.4% from 37.8% in August 2018.
“Competition in the Seattle area has certainly slowed down since the second half of 2018. Last year, five out of five offers I submitted faced competition; now, it’s one in five,” said Seattle Redfin agent Michelle Santos. “Now, for desirable homes, competition is still fierce, and the winning offer is one that’s above the list price and waives contingencies. At the same time, average homes sit on the market for quite some time before they get any offers.”
Atlanta, Georgia, was the least competitive market, as just 2% of offers faced competition.