Bidding Wars over Homes Continue to Recede in June Finds Latest Redfin Study
Rising Interest Rates, Increased Inventory Ease Competition
SEATTLE, July 11, 2013 /PRNewswire/ -- Redfin (www.redfin.com), the technology-powered real estate brokerage, today released its June 2013 Bidding War Report, based on Offer Insights, statistics compiled from more than 2,000 offers written each month by Redfin agents for their home-buying clients.
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Today's report shows that the real estate market is continuing to become less competitive for homebuyers. In June, the percentage of Redfin offers facing competition fell to 68.6 percent, down from 69.5 percent in May, and down from its peak of 75.7 percent in March. The slight cooling of the market in June was driven by surging interest rates and increased inventory. The average weekly 30-year fixed mortgage rate rose from 3.81 percent in late May to 4.46 percent as of late June, according to Freddie Mac. During that period, the number of Redfin's home-buying customers taking home tours fell 1.9 percent and offers dropped 5 percent. Inventory has been climbing since April and saw a 17% year-over-year jump in May.
"I have noticed a marked change in competition just over the last few weeks," said John Venti, a Redfin agent in Los Angeles, where still 86.1 percent of Redfin's offers faced bidding wars last month. "Each of the last three offers I wrote was accepted without a counter-offer, which has been unheard-of in LA, where a home in a popular neighborhood has typically attracted 30 or 40 offers over the last several months."
The housing market's easing has not been felt evenly across the country, however. The Baltimore and Washington DC metro areas saw the largest month-over-month drops in the percentage of offers Redfin agents wrote that faced bidding wars, falling by 11.2 and 6.8 points respectively. Meanwhile, San Diego, Orange County, CA and Boston became more competitive from May to June, with bidding war rates increasing by more than 4 percentage points.
The table below ranks the hottest real estate markets in order of competitiveness.
| Competitiveness Ranking |
Market |
Percent of Offers that Faced Competition, June 2013 |
Percent of Offers that Faced Competition, May 2013 |
Percent of Offers that Faced Competition, June 2012 |
Percent of Winning Offers that Were Over Asking Price |
Average Difference Between Offer Price on Winning Offers & Asking Price |
| #1 |
89.7% |
87.9% |
83.8% |
92.1% |
9.3% |
|
| #2 |
Orange County, CA |
88.6% |
83.9% |
84.3% |
45.5% |
-0.7% |
| #3 |
86.1% |
86.1% |
72.8% |
53.1% |
-1.6% |
|
| #4 |
81.9% |
72.6% |
80.2% |
39.3% |
-3.2% |
|
| #5 |
73.9% |
68.1% |
61.4% |
55.2% |
1.2% |
|
| #6 |
65.7% |
67.4% |
58.8% |
56.3% |
1.1% |
|
| #7 |
59.9% |
66.7% |
52.8% |
39.4% |
-0.1% |
|
| #8 |
49.2% |
48.4% |
34.6% |
20.0% |
-2.6% |
|
| #9 |
41.2% |
52.4% |
45.5% |
30.8% |
-0.8% |
|
| National |
68.6% |
69.5% |
63.7% |
51.0% |
0.9% |
To read the full report on Redfin's blog, complete with accounts of real bidding wars from Redfin agents and market-by-market statistics on offer strategies, click the following link. http://www.redfin.com/research/reports/real-time-bidding-wars.
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate broker that represents people buying and selling homes. Founded and run by technologists, Redfin has a team of experienced, full-service real estate agents who are advocates, not sales-people, earning customer-satisfaction bonuses, not commissions. Redfin's online tools feature all the broker-listed homes for sale, as well as for-sale-by-owner properties that don't pay brokers a commission. The company serves 21 U.S. markets and has closed more than $8 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World's Most Valuable Private Tech Companies by Business Insider. Follow us on our blog (blog.redfin.com), Twitter (@redfin), and Facebook (facebook.com/redfin), Redfin Collections (www.redfin.com/collections), and on our mobile apps (www.redfin.com/mobile).
SOURCE Redfin
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