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Bidding-War Rate Drops to Lowest Level Since April 2020 As Mortgage Rates Surge

Just over 4 in 10 Redfin home offers faced competition in August, down significantly from the year earlier as 6% mortgage rates price buyers out from the market

SEATTLE–(BUSINESS WIRE)–(NASDAQ: RDFN) Nationwide, 44.6% of home offers compiled by Redfin agents faced competition in August, the cheapest bidding-war rate because the start of the pandemic once the housing marketplace nearly ground to a halt, in accordance with a fresh report from Redfin (redfin.com), the technology-powered property brokerage. Its down from 63.5% per year earlier and a revised rate of 47.2% in July, and marks the seventh-straight monthly decline.

The normal home in a bidding war received 3.2 offers in August, weighed against 3.5 a month earlier and 5 twelve months earlier, in accordance with data submitted by Redfin agents nationwide.

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

Buyers are dropping out from the market and competition is dwindling largely because mortgage rates have doubled from the year ago, reaching 6% in mid-September. The upsurge in rates makes investing in a home a lot more expensive: A buyer investing in a $400,000 home includes a monthly mortgage repayment of roughly $2,500 with todays 6% mortgage rate, up from under $2,000 with last years 3% rates.

San Antonio, Tampa and Phoenix among metros with the cheapest 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 cheapest share of the 36 metros in this analysis.

Tampa, FL had the second-lowest bidding-war rate, with 23.8% of offers facing competition, accompanied by Olympia, WA (24.2%), Phoenix (26.4%) and Minneapolis (27%). Tampa, Olympia (portion of the greater Seattle metro) and Phoenix are on the list of 20 U.S. housing markets cooling fastest this season after attracting scores of homebuyers through the pandemic.

To be one of them analysis, metros will need to have had a monthly average of at the very least 50 offers submitted by Redfin agents from March 2021 to March 2022. Scroll right down to the bottom of the report to visit a table with data on all 36 metros.

Philadelphia, where 61.7% of offers faced competition, had the best bidding-war rate. Its accompanied by San Jose (58%), Providence, RI (54.5%), Boston (54%) and Detroit (52.9%).

Homebuyer competition declined most in NEW YORK

The bidding-war rate has declined most in Raleigh, NC, where 35.4% of home offers faced competition in August, down from 78.9% per year earlier. Its accompanied by San Antonio, where 59.8% of offers faced competition this past 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 every 36 metros in this analysis except Philadelphia, the metro with the best rate. The rate there’s up from 60.2% this past year.

Townhomes probably to handle competition, condos least likely

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

Townhouses are popular in todays pricey housing marketplace because theyre typically smaller and much 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%

NEVADA, 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%

NY, NY

42.2%

48.9%

60.4%

Miami, FL

42.2%

39.4%

57.5%

Washington, D.C.

44.3%

45.4%

54.1%

NORTH PARK, CA

45.5%

42.5%

68.3%

Sacramento, CA

45.5%

32.9%

65.5%

Honolulu, HI

45.7%

66.7%

59.6%

LA, 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 BAY AREA, 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%

To see the entire report, including charts and methodology, please visit: https://www.redfin.com/news/real-estate-bidding-wars-august-2022

About Redfin

Redfin (www.redfin.com) is really a technology-powered property company. We help people look for a spot to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for additional money and charge half the fee. We also run the country’s #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a house can take an instantaneous cash offer from Redfin or have our renovations crew fix up their house to sell for top level dollar. Our rentals business empowers millions nationwide to get apartments and houses for rent. Since launching in 2006, we’ve saved customers a lot more than $1 billion in commissions. We serve a lot more than 100 markets over the U.S. and Canada and employ over 6,000 people.

To learn more or even to contact an area Redfin agent, visit www.redfin.com. To understand about housing marketplace trends and download data, go to the Redfin Data Center. To be put into Redfin’s news release distribution list, email press@redfin.com. To see Redfin’s press center, just click here.

Contact Redfin

Redfin Journalist Services:

Ally Braun, 206-588-6863

press@redfin.com

Source: Redfin

Released September 23, 2022


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