Bidding wars declined again in September for the fifth successive month in a further sign that the housing market is becoming ever so slightly less competitive.
That’s according to a new report from Redfin, which found that 58.9% of offers submitted by its agents on behalf of clients had to compete with other bids. Although that still means more than half of all buyers faced bidding wars, it’s also the lowest level so far this year and almost on a par with September 2020, when 58.3% of bids faced competition.
In August, Redfin agents reported than 60.8% of all offers submitted faced competing bids.
Bidding wars hit their peak in April 2021 when a stunning 74.3% of all offers faced rival bids.
The fact bidding wars are now in decline is a clear sign the residential housing market is slowing down, but economists say what we’re seeing is most likely just a seasonal slowdown rather than any changing market dynamics. Other signs point to continued competitiveness, such as a full third of homes remaining on the market for less than a week and overall inventory being down 13% in September compared to a year ago.
Redfin Deputy Chief Economist Taylor Marr said it’s quite normal to see a seasonal decline in competition in September as kids head back to school and the weather cools down in many states.
“Buyers also aren’t having to offer as much above the asking price as they were in the spring, when competition in the housing market was peaking,” Marr added. “As mortgage rates continue to rise, we can expect bidding wars to keep slowing.”
Some areas are still seeing intense competition among buyers anyhow. In Raleigh, North Carolina, 73.9% of all bids submitted by Redfin agents faced competing offers. Other hot markets included Boston at 71.7%, Indianapolis at 71.4%, Sacramento, CA at 70.5% and San Diego at 70.3%.
Of course, the level of competition depends on where it is you’re trying to buy a home. The friendliest area for buyers in September was Milwaukee, where bids faced competition in just 24.1% of all cases, followed by Hartford CT and Sarasota FL at 39.1%, Virginia Beach, VA at 41.5% and Cleveland at 44.8%.
Some markets also cooled off much faster than others. In Jacksonville, FL, for example, bidding wars dropped from 71.4% in August to just 50% in September. Despite that, Jacksonville-based Redfin agent Heather Kruayai said the market was still far more competitive than in previous years.
“Fall in Jacksonville is historically a slow time, as fewer people are looking to move,” she said in a statement. “Even though there aren’t as many bidding wars, listings are still selling quickly, so it’s busier than previous years.”
Still, Kruayai admitted that conditions have eased somewhat, considering how incredibly competitive Jacksonville’s market was earlier in the year.
“During the spring and summer, I would get listings that would receive 30 offers within 24 hours of hitting the market and people offering as much as $70,000 over the asking price,” she said. “That’s not as common as now.”