No Bidding Wars This Year?

Bidding wars are growing a lot less common, real estate pros report. By one measure, only 11.2% of offers written by Redfin real estate agents for their clients faced a bidding war in July—down more than 45% from a year earlier. That is also the lowest rate since at least 2011.

Bidding wars have been gradually lessening in the housing market since peaking in March 2018, where 59% of real estate professionals reported competition in offers. Since November 2018, the bidding war rate has not surpassed 15%, Redfin reports.

“Mortgage rates have been mostly flat for the last month, and so has the home buyer competition, which was beginning a fast descent this time last year as mortgage rates were inching toward 5 percent,” says Daryl Fairweather, Redfin’s chief economist. “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, Fairweather predicts homebuying demand to strengthen in the second half of the year and the housing market to continue to stabilize. “But we may not see a big pop in bidding wars until early next year,” she adds.

While the numbers are down from a year ago, the following markets saw the highest number of bidding wars in July, according to Redfin’s index:

1. San Francisco: 35% (down from 72.4% a year ago)
2. San Diego: 21.3% (down from 61.5% a year ago)
3. Boston: 16.4% (down from 63.6% a year ago)
4. Los Angeles: 16% (down from 64.6% a year ago)
5. Philadelphia: 14.3% (down from 36.7% a year ago)
6. Denver: 14% (down from 48.8% a year ago)
7. Phoenix: 13.6% (down from 47.6% a year ago)
8. San Jose: 13.3% (down from 80% a year ago)
9. Sacramento, Calif.: 9.4% (down from 39.2% a year ago)
10. Washington, D.C.: 9.1% (down from 40.1% a year ago)