Home buyers didn’t need to put up much of a fight to score their dream home last month.
Only 10.4% of the offers made by Redfin agents on behalf of home buyers sparked a bidding war in August, the real estate brokerage reported Wednesday. That’s down from 11.4% the month prior, representing the lowest bidding-war rate Redfin has recorded since at least 2011.
It’s a far cry from a year earlier, when 42% of Redfin-written offers faced competition. The national bidding war rate reached its all-time high in March 2018, when 59% of Redfin’s offers were met with competing bids.
And though popular housing markets like San Francisco, Los Angeles and Boston still see elevated bidding-war rates, competition is much less fierce even in those locales. Nearly a third of Redfin-made offers (31%) in San Francisco saw competition in August — but that’s less than half the share that faced a bidding war a year earlier (73.5%).
The relative lack of bidding wars isn’t likely to please most home sellers, as competition among offers can boost the ultimate selling price of a home.
The report from Redfin RDFN, +0.82% adds to the mixed signals the housing market has been sending in recent weeks. There’s been some evidence that the precipitous drop in mortgage rates throughout the summer has led to an uptick in sales activity. At the same time, affordability and inventory-related constraints persist, keeping many prospective home buyers out of the market. Recent geopolitical concerns have also represented a downer for the housing market.
“Recession fears have been enough to spook some would-be buyers from making the big financial commitment of a home purchase,” Redfin chief economist Daryl Fairweather said in the report. Fairweather noted though that consumers could acclimate to the volatility in markets if a recession doesn’t occur this fall or winter — and if they do get used to that new normal, they may begin to start taking advantage of the low rates in earnest.
Redfin shares are up 3.06% over the last three months. That’s in line with the Dow Jones Industrial Average DJIA, +0.61% and the S&P 500 SPX, +0.64%, which are up 3.04% and 3.69% respectively over that same period.