54% of Redfin offers nationwide encountered bidding wars last month, down slightly from June’s revised…
54% of Redfin offers nationwide encountered bidding wars last month, down slightly from June’s revised rate of 56%, according to a new report from real estate brokerage Redfin.
This marks the third month in a row where more than half of Redfin home offers faced competition.
An offer is considered part of a bidding war if a Redfin agent reported that it received at least one competing bid.
Even as the coronavirus pandemic continues to send shockwaves through the U.S. economy, the bidding-war rate remains steady as homebuyers contend with competition driven by a dearth of homes for sale and record-low mortgage rates.
Last month, the average rate on 30-year fixed mortgages dropped below 3% for the first time in recorded history.
“Bidding wars may slow down if interest rates tick up again, which could happen if we get good news about a coronavirus vaccine or more clarity around the outcome of the upcoming U.S. presidential election,” said Redfin chief economist Daryl Fairweather. “At the same time, we may still be in the early innings of the pandemic migration wave. If coronavirus cases continue to climb, more employers will likely make flexible remote work policies standard procedure, which will drive further migration out of large, expensive cities. As a result, we may see bidding wars gain more traction in suburban areas and small towns.”
Single-family homes were most likely to encounter bidding wars in July, with 56% of Redfin offers facing competition, followed by townhouses, at 54%. Meanwhile, just 42% of offers for condos experienced bidding wars.
When broken down by price, homes priced between $400,000 and $500,000 were most likely to be met with competition, with 56% of offers facing bidding wars. By comparison, just 46% of offers for homes that were listed at above $1.5 million received multiple bids in July.
“If you price your home right and you haven’t Crayola crayoned all over the wall, you’re going to get at least a handful of offers,” said Tampa Redfin agent Brian Walsh.
Salt Lake City, San Francisco and San Diego are the most competitive markets
Salt Lake City had the highest rate of competition, with three-quarters of Redfin offers facing bidding wars last month. In second place was San Francisco/San Jose, at 67%, followed by San Diego, at 65%. At least half of all offers faced bidding wars in 13 of the 21 metros included in this analysis.
Las Vegas had the lowest bidding-war rate, with only 32% of offers facing competition last month. It’s followed by Miami and Chicago, at 36% and 40%, respectively.
To be included in this analysis, metros must have had at least 50 offers written by Redfin agents from July 1, 2020 to July 31, 2020.
Find out more at www.redfin.com.