Report: Competition Rate Lowest Since 2011

Competition among homebuyers has reached the lowest levels since 2011, as Redfin reports just 11.2% of offers faced a bidding war in July—a 45% year-over-year decline. 

Redfin states the national competition rate hasn't eclipsed 15% since November 2018. The rate peaked at 59% in March 2018.

“Mortgage rates have been mostly flat for the last month, and so has homebuyer competition, which was beginning a fast descent this time last year as mortgage rates were inching toward 5%,” said Redfin Chief Economist Daryl Fairweather. “On a local level, it’s noteworthy that some of 2018’s fiercely competitive markets—San Jose, Seattle, Los Angeles—have seen their bidding war rates plummet the most year-over-year. Home prices in these expensive markets have also been falling annually. Overall, I expect homebuyer demand to strengthen in the second half of the year as the housing market continues to stabilize, but we may not see a big pop in bidding wars until early next year.”

July’s most competitive markets was the nation’s most expensive—San Francisco, California. The report states that 35% of Redfin offers faced competition in the Bay Area, which is an annual decline from 72.4%, but an increase from June’s 28%. 

"Although the market isn’t as hot as it was last year, this spring and summer have been busy in San Francisco. That’s partly because homebuyers are feeling pressure to move quickly due to the high-profile tech IPOs, whether that pressure is real or perceived,” said San Francisco Redfin agent Miriam Westberg. “Low interest rates are also a factor in increased homebuyer interest since the beginning of the year. The market has definitely picked up since the winter and it seems like prices and competition are slowly heading back to mid-2018 levels.”

San Diego, California, followed its fellow Golden State market at 21.3%, with Boston, Massachusets (16.4%), Los Angeles, California (16%), and Philadelphia, Pennsylvania (14.3%) rounding out the top-five. 

Miami, Florida, held the distinction for least competitive market in July, with only 1.3% of offers faced competition. Houston was No. 2 at 4.8%, New York, New York, was at 6.3%, and Dallas, Texas recorded 6.6%.