Despite low housing supply continuing to affect the housing market as 2019 came to an end, Redfin indicates the frequency of bidding wars for real estate continued to fall.
According to the company, only 9% of purchasing offers made on its site faced a bidding war during the month. Not only is this percentage down 12% from last year’s rate, but it also pushed the rate down to another 10-year-low.
Daryl Fairweather, Redfin’s chief economist, said bidding war rates likely hit their true bottom in December. And Despite the decline, Redfin claims the rate is likely to rise again as the nation’s real estate market heats up in the spring.
“Amid the current global economic uncertainty, mortgage rates will remain low in the coming months, which will boost demand for homes in 2020,” Fairweather said. “That means more buyers competing against each other and bidding up prices.”
This is already happening with San Francisco as the report determined the city was the only housing market to experience notable competition in December.
During the month, the bidding war rate was 26% in San Francisco, down from 35% a year earlier. Although this rate is a slight decline from November’s rate of 28%, it’s still significant, considering inventory is still a problem within the city’s housing market.
“There aren’t typically very many homes for sale in San Francisco in December,” said Saleem Buqeileh, Redfin market manager. “Last month we saw more buyers than usual out looking for a ‘steal’ and bidding on homes, which led to multiple offer situations on some homes where all of the buyers came in below list price, rather than above.”
Although competition continued to heat up in San Francisco’s housing market, Redfin notes it was scarce everywhere else in the country, with no other market seeing a bidding war rate higher than 17% in December.
In Dallas and Raleigh, North Carolina, the bidding war rate fell to zero and hit its lowest point in at least five years in Los Angeles. Aside from the zero rates, Atlanta had the third-lowest bidding war rate in December at 4%.
NOTE: Redfin’s analysis is based on home offer and purchase data gathered from thousands of Americans that bought homes with Redfin agents over the past five years.
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