Competition for homes across the U.S. dropped from 68.6 percent in June to 63.3 percent in July. The number of offers facing competition peaked in March at 75.7 percent.
Increasing inventory, rapidly rising home prices and interest rate spikes all contribute to the continuing trend toward a less competitive market. Less measurable market forces such as buyer fatigue and buyers taking summer vacations probably also played a role in this trend.
Budding wars are abating as is in line with other research that points toward the strong sellers’ market beginning to shift toward more balance, giving frustrated home-buyers a bit of relief. Redfin agents report that buyers who have been in the market for even a few months have noticed the change in their favor, the Redfin brokerage reported today.
Redfin agents and analysts are closely monitoring bidding war rates, expecting them to continue their downward trend into the fall. This would be a contrast to last year’s pattern, which saw the market heat up in the autumn months.
The report’s key findings include:
- As a result of reduced competition, winning offers fell closer to list prices for the second consecutive month. Nationally, the average difference between winning offers and list prices fell to 0.6 percent in July from 0.9 percent in June and 1.4 percent in May.
- San Diego and Orange County saw the largest decreases in competition, with bidding war rates falling by more than 10 percentage points in July.
- Washington, D.C.’s bidding war rate saw the smallest decline, falling just 1.2 points in July.
- Baltimore was the only metro area where bidding wars increased, with an 8.8 percentage point jump in July.
The table below ranks the hottest real estate markets in order of competitiveness.