Redfin Report: Bidding Wars Return to San Francisco, Where 35% of Redfin Offers Faced Competition in May
Bidding wars are still rare in other previously-hot housing markets
More homebuyers are having success with contingent offers this year
SEATTLE, June 11, 2019 /PRNewswire/ -- (NASDAQ: RDFN) — Thirty-five percent of offers written by Redfin agents on behalf of their home-buying customers in San Francisco faced a bidding war in May, up from 5 percent in January but down from 77 percent in May 2018, according to a new report from Redfin (www.redfin.com), a technology-powered real estate brokerage. Nationally, just 16 percent of Redfin offers faced a bidding war in May.
"Earlier this year, the San Francisco housing market appeared to be running out of gas, but the recent tech IPOs have reignited competition," said Redfin chief economist Daryl Fairweather. "Buyers want to get in now before prices shoot up, while many would-be sellers are holding out for higher prices. With more people looking to buy homes than there are homes for sale, what you have is a recipe for bidding wars."
San Francisco was the most competitive market in the nation in May, beating San Diego (24%), the second-most competitive market, by over 10 points. No other metro saw more than one in five offers face competition in May.
"Bidding wars are back with a fury in San Francisco," said local Redfin agent Miriam Westberg. "We've seen as many as 33 offers on one property recently, and most offers have no contingencies or are all-cash offers substantially higher than the list price. A few recent buyers have been surprised by how much competition they faced when they submitted their first offer since they heard about the slowdown at the end of last year. But it just takes that one failed offer for most to realize what they are in for. It feels like early spring/summer 2018 again."
The least competitive market in January was Miami, where just 1 percent of Redfin offers faced competition. Raleigh (5%) and Dallas (6%) were the second- and third-least competitive.
Table: Share of Redfin Offers that Faced Bidding Wars |
|||
Metro Area |
May 2019 |
May 2018 |
April 2019 |
San Francisco, CA |
35% |
77% |
32% |
San Diego, CA |
24% |
73% |
19% |
Boston, MA |
19% |
74% |
18% |
Austin, TX |
16% |
47% |
14% |
San Jose, CA |
16% |
83% |
18% |
Seattle, WA |
14% |
62% |
16% |
Philadelphia, PA |
14% |
51% |
14% |
Los Angeles, CA |
13% |
71% |
18% |
Washington, D.C. |
13% |
53% |
13% |
Portland, OR |
13% |
43% |
15% |
Denver, CO |
12% |
57% |
20% |
Atlanta, GA |
12% |
34% |
6% |
Houston, TX |
11% |
46% |
7% |
Phoenix, AZ |
10% |
36% |
19% |
Chicago, IL |
8% |
36% |
14% |
Sacramento, CA |
8% |
62% |
13% |
Dallas, TX |
6% |
59% |
6% |
Raleigh, NC |
5% |
43% |
4% |
Miami, FL |
1% |
33% |
5% |
According to another report released today by Redfin, buyers are able to be more judicious with their competitive offer strategies this year, too. A growing share of buyers have had offers accepted that included inspection and/or financing contingencies. These are standard home purchase contract components meant to protect buyers that, when waived, serve as strategies to make an offer stronger and more competitive.
In May, 14.6 percent of accepted offers waived the inspection contingency, down from 19.8 percent a year earlier. And 11.7 percent of accepted offers in May waived the financing contingency, down from 13.2 percent a year prior. The use of home-sale contingencies, which make an offer contingent on the sale of the buyer's home, in accepted Redfin offers nearly doubled, to 8.4 percent in May 2019 from 4.4 percent a year earlier.
To read the full bidding wars report, please visit: https://www.redfin.com/blog/may-2019-bidding-wars.
For the full report on contingent offers, including methodology, visit: https://www.redfin.com/blog/homebuyer-contingencies-may-2019.
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 85 major metro areas across the U.S. and Canada. The company has closed more than $85 billion in home sales.
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, subscribe here. To view Redfin's press center, click here.
SOURCE Redfin
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