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