Bad news, home sellers: You’re less likely to see a bidding war for your property

Published: Sept 4, 2019 10:13 a.m. ET

A new report from Realtor.com found that the bidding-war rate has dropped to an eight-year low.  Even in cities like San Francisco it’s become much less common to witness a bidding war for a home.  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 agents on behalf of home buyers sparked a bidding war in August, the real estate website reported Wednesday. That’s down from 11.4% the month prior, representing the lowest bidding-war rate recorded since at least 2011.

It’s a far cry from a year earlier, when 42% of written offers faced competition. The national bidding war rate reached its all-time high in March 2018, when 59% of 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 Realtor 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 Realtor.com 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,” Realtor 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.

Jacob Passy is a personal-finance reporter for MarketWatch

Investors cheered the jobs news on Friday morning as March employment activity bounced back from a sour February performance, according to the monthly federal report. The news that employers created 196,000 net new jobs in March beat expectations and gives markets that had wavered a fresh indicator that job creation hasn’t lost all momentum.

The strong showing contrasts with just 20,000 net new jobs in February, although that number was revised up to 33,000 on Friday, which is still far below expectations. Those disappointing February results prompted some analysts to wonder if the now decade-long expansion in the labor markets was drawing to a close. March results suggest that’s not true just yet.

The national unemployment rates remains at 3.8%, on par with expectations. The good news in March was possible thanks to 49,000 new workers in health care, professional and technical services gains of 34,000 and restaurants and food service adding 27,000. Construction rose by 16,000 jobs, but manufacturing saw 6,000 jobs lost in March.

Wage growth was less impressive. Wages increased just 0.14% in March and is now up 3.2% over the last 12 months. Analysts expected year-over-year wage growth to hit 3.4%.

The results released Friday give new hope for continued economic growth. The Atlanta Fed is now projecting first quarter GDP to rise 2.1%, after much smaller estimates a few weeks ago.

Fed officials continue to keep a close eye on jobs as they weigh monetary policy moves. The Fed has paused its rate hikes as it awaits more economic data. Some had speculated after the disappointing jobs report in February that the Fed may be forced to reduce rates later this year. However, the good report Friday likely puts those concerns on hold. Investors will now watch other key indicators to see how long the Fed holds rates steady. No changes are predicted in the coming months, unless economic data shifts drastically.

10 Year Treasury yields leveled off around 2.5% in early trading Friday. Treasury’s traded off this week after bottoming out a 2.35% last Friday, ending March on a downward trend that sent the mortgage market firmly into refinance territory. While Friday’s news will likely calm the rally in bonds in the very near term, don’t expect a real rise in rates anytime soon. The refinance opportunity for many mortgage borrowers that purchased homes last year remains in place while low rates should continue to push the spring buying season into a renewed frenzy.

It's an overall good time to buy and add to your portfolio, or refinance your existing property, if you haven't already done so, in the past 3 years.   

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