SEATTLE, Oct. 20, 2020 /PRNewswire/ -- (NASDAQ: RDFN)
— 56.3% of Redfin offers on homes faced competition nationwide in
September, down from a revised rate of 59.1% in August, according
to a new report from Redfin (www.redfin.com), the
technology-powered real estate brokerage. While that's the first
decline in at least five months, a majority of offers still
encountered bidding wars for the fifth month in a row, indicating
that competition remains intense in many parts of the country.
The housing market has been on fire since the start of summer
due to record-low mortgage rates and a shortage of homes for sale,
and competition remains fierce despite a slight drop off in bidding
wars, according to Redfin chief economist Daryl Fairweather.
"The slight decline in bidding wars is largely a reflection of a
seasonal cooldown, which typically starts in the late summer but
was delayed by a few months this year," Fairweather said. "But
homebuyers are still sweating as they navigate what remains an
unseasonably hot seller's market."
Tampa Was the Least Competitive Market; Salt Lake City Was
the Most Competitive
Tampa,
FL had a lower rate of competition than any other metro area
in this analysis, with just 26.3% of offers facing bidding wars in
September, down from 54.1% in August. Rounding out the bottom three
were two other southeastern markets—Miami, which had a bidding-war
rate of 38%, and Raleigh, NC, at
41.4%.
"Until very recently, bidding wars were entirely ubiquitous in
Tampa, but it suddenly seems like
buyers have had enough of sellers' pie-in-the-sky, aspirational
pricing. The market is getting a little too hot, and buyers
are feeling fatigued," said Tampa
real estate agent Brian Walsh. "It's
getting to the point where you'll see a seller demand $50,000 over what they paid a year ago—and the
only thing they've done to the home is minimal DIY renovations,
like slapping on some new paint and flooring. Some of my buyers
have decided to take a break from making offers altogether and just
wait until the market cools off."
At least half of offers faced bidding wars in 15 of the 24
metros in this analysis.
Salt Lake City had the highest
bidding-war rate, with 81.1% of Redfin offers encountering
competition. In second place was San
Diego, at 69.1%, followed by San
Francisco/San Jose, at
67.4%.
"Salt Lake City has been going
crazy," said local Redfin real estate agent Dean Cotter. "If I have a house in reasonable
condition priced at the average price range, it gets multiple
offers and is gone in a weekend."
A relatively acute housing shortage in Salt Lake City is fueling fierce competition.
The number of homes for sale shrunk 50% year over year in
September, compared with a national decline of 22.8% on a
seasonally adjusted basis. A lack of homes being added to the
market is what's driving the shortage; new listings plunged 53% in
September from the prior year, compared with a 5.9% gain
nationwide. A 2019 Redfin analysis found that Salt Lake City homeowners stay in their homes
longer than homeowners in other major metros. The pandemic has
likely encouraged residents to stay put for even longer, according
to Fairweather.
Single-Family Homes Were the Most Likely to Face
Competition
Single-family homes were most likely to
encounter bidding wars in September, with 58.9% of Redfin offers
facing competition, followed by townhouses, at 56%. Meanwhile, just
40.5% of offers for condos experienced bidding wars. The condo
market has seen relatively slow growth as remote work, the desire
for privacy and record-low mortgage rates have made single-family
homes more desirable during the coronavirus pandemic.
"Condos are not selling as fast as they used to," said
Mary Bazargan, a Redfin real estate
agent in Washington, DC.
"Single-family homes are selling fairly quickly as long as they're
priced right. The homes we price correctly or a little
conservatively are getting multiple offers. The ones that push the
price aggressively high are sitting on the market."
Bidding-War Rates By Metro Area, September 2020 and August
2020
Metro
Area
|
Share of Redfin
offers that
faced bidding wars in
September 2020
|
Share of Redfin
offers that faced
bidding wars in August 2020
|
Salt Lake City,
UT
|
81.1%
|
69.0%
|
San Diego,
CA
|
69.1%
|
73.0%
|
San Francisco / San
Jose, CA
|
67.4%
|
70.5%
|
Washington,
D.C.
|
65.6%
|
67.9%
|
Minneapolis,
MN
|
63.9%
|
61.4%
|
Portland,
OR
|
61.0%
|
60.4%
|
Austin, TX
|
60.4%
|
60.2%
|
Sacramento,
CA
|
59.3%
|
64.0%
|
Seattle,
WA
|
59.2%
|
64.4%
|
Phoenix,
AZ
|
57.4%
|
61.3%
|
New York,
NY
|
57.1%
|
53.7%
|
Boston, MA
|
56.7%
|
64.4%
|
Los Angeles,
CA
|
56.2%
|
62.7%
|
Philadelphia,
PA
|
55.8%
|
60.8%
|
Houston,
TX
|
50.0%
|
46.9%
|
Denver, CO
|
49.8%
|
52.6%
|
Dallas, TX
|
49.0%
|
44.0%
|
Detroit,
MI
|
47.5%
|
56.4%
|
Las Vegas,
NV
|
47.5%
|
40.4%
|
Atlanta,
GA
|
47.4%
|
51.0%
|
Chicago,
IL
|
41.9%
|
45.2%
|
Raleigh,
NC
|
41.4%
|
47.5%
|
Miami, FL
|
38.0%
|
34.5%
|
Tampa, FL
|
26.3%
|
54.1%
|
To read the full report, please visit:
https://www.redfin.com/news/real-estate-bidding-wars-september-2020.
About Redfin
Redfin (www.redfin.com) is a
technology-powered residential real estate company, redefining real
estate in the consumer's favor in a commission-driven industry. We
do this by integrating every step of the home buying and selling
process and pairing our own agents with our own technology,
creating a service that is faster, better and costs less. We offer
brokerage, iBuying, mortgage, and title services, and we also run
the country's #1 real estate brokerage search site, offering a host
of online tools to consumers, including the Redfin Estimate. We
represent people buying and selling homes in over 90 markets in
the United States and Canada. Since our launch in 2006, we have
saved our customers over $800 million
and we've helped them buy or sell more than 235,000 homes worth
more than $115 billion.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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SOURCE Redfin