Just under half (49.9 percent) of home offers written by Redfin agents faced competition on a seasonally adjusted basis in June, according to a Redfin report. That’s the lowest share since May 2020 and the first time the bidding-war rate has been below 50 percent since that same month, when the housing market was at a near standstill due to the onset of the pandemic.
June’s bidding-war rate compares with a revised rate of 65 percent a year ago and 57.3 percent in May.
Housing-market competition is declining because higher mortgage rates, high home prices, inflation and a falling stock market have eroded homebuyer budgets, causing some house hunters to drop out of the market, according to Redfin. Roughly 60,000 home-purchase agreements were called off in June, equal to 14.9 percent of homes that went under contract that month. That’s the highest percentage on record, except for the start of the pandemic.
“While the market is cooling, it’s not coming to a crashing halt,” Seattle Redfin real estate agent Shoshana Godwin said in a release. “House hunters who can still afford to buy should consider taking advantage of the slowdown given that there’s way less competition.”
In Riverside, Calif., 31.9 percent of home offers written by Redfin agents faced competition in June, down from 70.5 percent a year earlier. That year-over-year decline was the largest among the metro areas Redfin analyzed. Next came Raleigh, N.C. (38.9 percent vs. 74.1 percent), Charlotte, N.C. (48.1 percent vs. 80 percent), Seattle (41.4 percent vs. 71.6 percent) and Honolulu (38.9 percent vs. 69 percent).
“Showings have dramatically decreased. Homes that would’ve had 20 showings two months ago are now getting one or even none,” Minneapolis Redfin real estate agent Jenny Dedrick said. In Minneapolis, the bidding-war rate fell to 45.7 percent in June from 65 percent a year earlier. “I had one seller take his home off the market because it only got one showing. He decided to rent it out instead. He’s moving to Mexico and thought, ‘why not let it sit and keep appreciating?’”
Competition increased on a year-over-year basis in just two of the 36 markets Redfin analyzed. In Colorado Springs, Colo., 55.9 percent of home offers written by Redfin agents faced competition in June, up from 45.9 percent in June 2021. In Providence, R.I., the bidding-war rate rose slightly to 77.6 percent from 77.1 percent.
Providence had the highest share of home offers written by Redfin agents encounter competition in June. It was followed by Boston (71.7 percent), Philadelphia (65.7 percent), Indianapolis (64.3 percent) and Worcester, Mass. (62.7 percent).
Tampa, Fla., had the lowest bidding-war rate, (28.9 percent), followed by Riverside, Calif. (31.9 percent), Phoenix (35.3 percent), Honolulu (38.9 percent) and Raleigh, N.C. (38.9 percent).
Townhouses were more likely than any other property type to encounter bidding wars, with 54.6 percent of Redfin offers facing bidding wars in June. Next came single-family homes (52.3 percent), condos/co-ops (47 percent) and multi-family properties (41.3 percent).