Homebuyers got a bit more competitive as bidding war rate saw a slight uptick month over month.
Redfin reported that just 11% of offers nationwide faced a bidding war in September, up from the eight-year low of 10% in August. A year ago, the rate of bidding wars was 41%. Redfin said the small gain was unusual as bidding wars from August to September typically experience a 0.8-point decline.
"After the coolest spring home-selling season in at least eight years, homebuying competition didn't have far to fall, but low mortgage rates ultimately drove a modest uptick in bidding wars in late summer when they typically become less common," said Redfin Chief Economist Daryl Fairweather. "With mortgage rates likely to remain near historic lows, I expect the bidding war rate to continue to level off – rather than follow its typical end-of-year descent – as 2019 comes to a close."
On average, seasonal homebuying competition drops 15 percentage points from March, the month it typically peaks, to September. However, the national bidding war rate declined by just four points during the same period this year.
"More sellers are pricing their homes a little below the price they expect to sell at, which is encouraging bidding wars to drive up price," said Kimberly Douglas, a Redfin agent in San Jose. "In addition to teaser pricing like this, I've seen very aggressive price drops happening more often lately."
San Francisco remained the most competitive metro in September, with 28% of Redfin offers facing a bidding war. However, it fell from 69% the year before.
Las Vegas (21%), Phoenix (21%), and San Jose (18%) followed. No other metros reported more than one in five offers face competition in September.
Miami replaced Atlanta as the least competitive market, with a bidding war rate of 2%. Dallas (3.1%) and Austin (3.6%) rounded out the top three least competitive metros.