Real Estate News: Bidding-War Rate Drops to Lowest Level Since April 2020

Real Estate Sales

Nationwide, 44.6% of home offers written by Redfin agents faced competition in August, the lowest bidding-war rate since the beginning of the pandemic when the housing market nearly ground to a halt, according to a new report from Redfin, the technology-powered real estate brokerage. It’s down from 63.5% a year earlier and a revised rate of 47.2% in July, and marks the seventh-straight monthly decline.

The typical home in a bidding war received 3.2 offers in August, compared with 3.5 one month earlier and 5 one year earlier, according to data submitted by Redfin agents nationwide.

The bidding-war rate is falling as the housing market cools and buyers back off from the pandemic-driven homebuying frenzy in 2021 and early 2022, with the number of home sales down nearly 20% year over year.

Buyers are dropping out of the market and competition is dwindling largely because mortgage rates have doubled from a year ago, reaching 6% in mid-September. The increase in rates makes buying a home much more expensive: A buyer purchasing a $400,000 home has a monthly mortgage payment of roughly $2,500 with today’s 6% mortgage rate, up from under $2,000 with last year’s 3% rates.

San Antonio, Tampa and Phoenix among metros with the lowest bidding-war rates

Just over one in five (21.7%) of home offers submitted by Redfin agents in San Antonio, TX faced competition in August, the lowest share of the 36 metros in this analysis.

Tampa, FL had the second-lowest bidding-war rate, with 23.8% of offers facing competition, followed by Olympia, WA (24.2%), Phoenix (26.4%) and Minneapolis (27%). Tampa, Olympia (part of the greater Seattle metro) and Phoenix are all among the 20 U.S. housing markets cooling fastest this year after attracting scores of homebuyers during the pandemic.

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To be included in this analysis, metros must have had a monthly average of at least 50 offers submitted by Redfin agents from March 2021 to March 2022. Scroll down to the bottom of this report to see a table with data on all 36 metros.

Philadelphia, where 61.7% of offers faced competition, had the highest bidding-war rate. It’s followed by San Jose (58%), Providence, RI (54.5%), Boston (54%) and Detroit (52.9%).

Homebuyer competition declined most in North Carolina

The bidding-war rate has declined most in Raleigh, NC, where 35.4% of home offers faced competition in August, down from 78.9% a year earlier. It’s followed by San Antonio, where 59.8% of offers faced competition last year.

Charlotte, NC (31.4%, down from 68.8%), Olympia, WA (24.2%, down from 60.7%) and Colorado Springs, CO (29.7%, down from 62.5%) round out the five metros where competition has dropped most.

The bidding-war rate declined in all 36 metros in this analysis except Philadelphia, the metro with the highest rate. The rate there is up from 60.2% a year ago.

Townhomes most likely to face competition, condos least likely

Offers for townhouses were more likely than other property types to encounter competition, with 44.1% of Redfin offers facing bidding wars. They were followed by single-family homes (42.1%), multi-family properties (40.2%) and condos (37%).

Townhouses are popular in today’s pricey housing market because they’re typically smaller and more affordable than single-family homes.

Bidding-War Rates by Metro Area

This table is sorted by lowest to highest bidding-war rates in August 2022

U.S. metro area

August 2022: Share of Redfin offers
that faced competition

July 2022: Share of Redfin offers
that faced competition

August 2021: Share of Redfin offers
that faced competition

San Antonio, TX

21.7%

43.4%

59.8%

Tampa, FL

23.8%

35.7%

53.6%

Olympia, WA

24.2%

47.7%

60.7%

Phoenix, AZ

26.4%

26.9%

57.9%

Minneapolis, MN

27%

49%

50%

Austin, TX

28.6%

33.3%

58%

Colorado Springs, CO

29.7%

38.5%

62.5%

Orlando, FL

30%

42.4%

56.7%

Las Vegas, NV

30.9%

38.4%

56.3%

Charlotte, NC

31.4%

35.4%

68.8%

Seattle, WA

33.9%

32.2%

62.4%

Atlanta, GA

34.9%

44.8%

59.6%

Raleigh, NC

35.4%

63.8%

78.9%

Houston, TX

36.7%

45.8%

49.6%

Denver, CO

38.9%

37.9%

57.9%

Riverside, CA

39.4%

32.9%

67.2%

Nashville, TN

40%

35%

60.5%

Chicago, IL

41.9%

48.4%

46.4%

Dallas-Fort Worth, TX

41.9%

53.6%

65.6%

New York, NY

42.2%

48.9%

60.4%

Miami, FL

42.2%

39.4%

57.5%

Washington, D.C.

44.3%

45.4%

54.1%

San Diego, CA

45.5%

42.5%

68.3%

Sacramento, CA

45.5%

32.9%

65.5%

Honolulu, HI

45.7%

66.7%

59.6%

Los Angeles, CA

49.1%

58.4%

69.8%

Portland, OR

49.3%

41.4%

63.5%

Baltimore, MD

50.3%

54.7%

58.6%

Worcester, MA

51.2%

54.3%

65.3%

Indianapolis, IN

51.6%

47.4%

57.1%

San Francisco, CA

52.5%

52.8%

69.9%

Detroit, MI

52.9%

46.8%

68.1%

Boston, MA

54%

55.2%

68.7%

Providence, RI

54.5%

61.4%

60%

San Jose, CA

58%

52.9%

72.3%

Philadelphia, PA

61.7%

63.1%

60.2%

READ:  Real Estate Forecast: Home Prices Not Coming Down in 2023
To view the full report, including charts and methodology, visit https://www.redfin.com/news/real-estate-bidding-wars-august-2022.

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