Bidding wars are unlikely to be as commonplace this year as they face less competition due to growing inventories in many markets, according to a new Redfin analysis.
In April, just 15% of offers faced competing bids, Redfin said. That’s down 60% from a year ago, it added.
The reduced competition is even being felt in some of the nation’s most competitive housing markets, Redfin said.
“Right now could be as good as it gets for buyers who want to avoid getting involved in bidding wars and price escalations,” said Daryl Fairweather, Redfin’s chief economist. “There are many forces at play that may lure buyers back and create more competition in the near future. Interest rates are low compared to last year, price growth has stalled and has even fallen in some West Coast markets, and wages are growing.”
The most likely market for bidding wars remains in San Francisco’s Bay Area, which saw 22% of offers in April face competition. Even so, that’s still down 75% from a year ago.
“Multiple billion-dollar San Francisco-based companies are going public this year, so I wouldn’t be surprised to see Bay Area bidding wars come back with a vengeance, pushing prices back up next year,” Fairweather said.
The next most competitive housing markets after San Francisco were Phoenix (20%) and San Diego (19%), according to Redfin’s index.
Overall, every metro area tracked by Redfin’s index saw a lower bidding war rate in April compared to a year ago. The least competitive housing markets in April were Miami (3%); Raleigh, N.C. (5%); Dallas (7%); Atlanta (7%); and Houston (7%).