It was a competitive November in the housing market—a new data report from Redfin found 53.6% of home offers written by the Seattle-headquartered brokerage’s agents nationwide were involved in a bidding war.
Although November’s data was a decline from the revised rate of 58.5% in October, it nonetheless represented the seventh consecutive month when more than half of Redfin offers evolved into bidding wars between would-be buyers. Redfin attributed this trend to historically low mortgage interest rates coupled with a supply-and-demand imbalance and an increase in homeownership interest fueled by the rise of pandemic-impacted workforce handling their jobs from home.
The majority of the most intense bidding wars appeared to be concentrated in the West Coast. Among the 24 major metro areas analyzed for the report, San Diego had the highest bidding-war rate with 75.3% of Redfin offers facing competition, followed by Denver (66.7%), the combined Bay Area’s metros of San Francisco and San Jose (65.8%), Seattle (60.9%), Sacramento (60%), Los Angeles (59.5%), Washington, D.C. (58.7%), Austin (58.1%), Phoenix (57.7) and Salt Lake City (56%).
At the other end of the spectrum, Minneapolis had a lower rate of November competition with 34.6% of Redfin offers facing bidding wars in November. Rounding out the bottom five were Chicago (36.4%), Tampa, FL (37.1%), Houston (37.3%) and New York (37.6%). Among property types, single-family homes generated the greatest level of bidding wars (57.3%), compared to townhouses (48.7%) and condominiums (38.3%).
"Buyers aren't going to compete for homes that have been sitting on the market," said Redfin Chief Economist Daryl Fairweather. "They will typically only get into a bidding war for a newly-listed, desirable home that is move-in ready."
And it appeared that the bidding wars helped to pump up the price tags on available property. Redfin also reported the national median home price rose in November by 14% year-over-year to $335,519, marking the second-largest annual increase since at least 2012. Closed home sales were up by 23% from one year ago while pending sales were up 37% and new listings merely recorded an 8% annualized uptick.
"Neither the election nor the Thanksgiving holiday weekend curbed homebuyers' appetite in November," Fairweather said. "I personally bought a home last month because I knew if I didn't seal the deal by then, I would have to wait until January for more new listings to hit the market to find one that checked all of my boxes. Plus, there is no guarantee mortgage rates will stay this low for much longer. And like most buyers this time of year, once I had it in my head that it was time to move, I wanted to be settled in my new home in time for the holidays."