Bidding wars continue decline as low rates don't revive competition
Barely more than a tenth of homebuyers found themselves in a bidding war in August, as consumers shied away with a possible recession looming on the horizon, according to Redfin.
Only 10.4% of home purchase offers submitted through Redfin agents faced at least one other bid, the lowest rate for multiple offers since the brokerage started tracking the data in January 2011. Competition dropped year-over-year from 42% of houses receiving multiple offers and even from July's 11.4%.
"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," Daryl Fairweather, Redfin chief economist, said in a press release.
"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 home buying competition to pick back up in the new year," she continued.
Atlanta was the least competitive of the 21 major markets analyzed by Redfin, where just 2.4% of the offers had a competing bid. Miami's 3.1% and 4.2% in Raleigh, N.C., came next.
On the opposite end of the spectrum, potential buyers in San Francisco faced competition 31% of the time. By comparison, 73.5% of San Francisco properties fielded multiple offers last August. Below that were two other West Coast locales, San Diego at 18.4% and Las Vegas at 17.1%.
"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 local 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."