Seattle rates among those to fall below national level, even as competition in the Bay Area sees unseasonable uptick. Despite a smaller than anticipated impact from recent tech IPOs.
Nationally, just 10 percent of offers written by Redfin agents on behalf of their homebuying customers faced a bidding war in October, down from 39 percent a year earlier and now at a 10-year low. However, low mortgage rates and a lack of homes for sale point to a likely return of bidding wars next year.
Of the top five markets where bidding wars were most common in October, four were in California—San Francisco (34.8%), San Jose (20.5%), San Diego (15.6%) and Los Angeles (13.7%). On the East Coast, in Philadelphia, 13.8 percent of offers faced bidding wars.
The rate of bidding wars in San Francisco and San Jose hit new highs for the year in October, a month when competition typically cools. That said, both markets’ bidding war rates were still well below last year’s levels of 58.1 percent and 64.9 percent, respectively.
If 2019’s big tech stock IPOs like Uber, Lyft, and Slack had been as hot as many expected earlier in the year, it’s likely the market in the Bay Area would be a lot more competitive right now.
“There was a lot of hype earlier this year in the Bay Area around some big IPOs,” said Palo Alto Redfin agent Kalena Mashing. “But we haven’t seen that hype translate into a hot market, regardless of how well the IPOs did. Really, it’s not the IPO money making the market hot, it’s the perception that the IPO money COULD make the market hot that has really driven the local housing market this year.”
This unseasonal uptick in competition in the Bay Area may be a sign of things to come elsewhere, according to Redfin chief economist Daryl Fairweather. “Right now, there are fewer homes for sale than we usually see this time of year, and sales are picking up thanks in part to low mortgage interest rates. All of the pieces are in place for bidding wars to become more common and for the housing market to shift back toward the seller’s favor next year,” said Fairweather. “Now may be the last chance in the foreseeable future for buyers to win a home without facing a bidding war.”
Rate of Bidding Wars by Metro Area: October 2019
|Metro Area||Share of Redfin Offers that Faced Competition October 2019||Share of Redfin Offers that Faced Competition October 2018||Share of Redfin Offers that Faced Competition September 2019|
|San Francisco, CA||34.8%||58.1%||28.0%|
|San Jose, CA||20.5%||64.9%||17.1%|
|San Diego, CA||15.6%||44.2%||19.4%|
|Los Angeles, CA||13.7%||54.4%||11.8%|
|New York, NY||7.9%||42.6%||9.3%|
|Las Vegas, NV||4.5%||40.0%||20.0%|
Seattle now has a lower bidding war rate than the national level, at just 8.8 percent in October—just barely above the 10-year low set in July. This is despite the fact that a year ago it used to be among the most competitive markets, along with San Francisco and San Jose.
“Homebuyers in Seattle know that in the current market they don’t necessarily have to go through the emotional heartburn that comes with bidding wars,” said Seattle Redfin agent Jessie Boucher. “Even though there aren’t a ton of homes for sale right now, buyers are able to preserve their contingencies and maybe even get a great deal.”
Miami, FL was the least competitive market in October, with just 3.7 percent of offers facing a bidding war there. Atlanta, GA was barely above that at 3.8 percent, and Las Vegas, NV was the third least competitive market with 4.5 percent of offers facing competition.