SEATTLE, WA -- Redfin (www.redfin.com), the technology-powered real estate brokerage, recently released its November 2013 Real-Time Bidding War Report based on Offer Insights, statistics compiled from thousands of offers written each month by Redfin agents for their home-buying clients.
In November, competition for homes hit its lowest point since 2011, with 51.7 percent of Redfin offers facing bidding wars, down from 54.8 percent in October and from 63.6 percent a year earlier. Nationally, the home-buying competition rate has now been declining for eight straight months after peaking at 75.3 percent in March. Even though bidding wars are becoming less common, demand from homebuyers has been stronger than expected for the end of the year. Redfin agents report that this season's homebuyers are extremely motivated to get a home under contract before the end of the year, knowing that competition may increase in the new year.
"Homebuyers who failed to get an offer accepted early in the year have been stockpiling down payment money all year long," said Amber Hancock, manager of Redfin's San Francisco East Bay market. "They're jumping back in this time as better qualified, more confident competitors, taking advantage of the easing late-fall market."
The report's key findings include:
Seattle and Orange County saw the biggest month-over-month declines in competition, with 11.8 and 11.4 percentage point drops, respectively.
Bidding wars became more common in November in Washington, D.C. (+8.2%), San Diego (+5.7%), Baltimore (+5.6%) and Los Angeles (+4.3%).
Homebuyers in Chicago and Orange County enjoyed the greatest negotiating power in November, when home sale prices, on average, represented discounts of 4.4% and 4.3% from sellers' list prices.
San Jose and San Francisco where the only markets among Redfin's most competitive where the average home sold for more than its asking price, with home-sellers enjoying premiums of 1.8% and 0.4%, respectively.
Three-quarters of homes sold in November in San Jose went for more than their asking price, and in San Francisco, 54.3% of homes sold above list price.
Despite fewer bidding wars, competitive strategies including all-cash offers, waived financing and inspection contingencies, and personal cover letters were used more often in November than in October.
The cover letter saw the most dramatic late-season increase as a winning offer strategy, with 35.9% of Redfin clients' winning offers including a cover letter in November, compared to 23.7% in October. In traditionally competitive Orange County and San Francisco, cover letters were included in the majority of winning offer packages.
To read the full report on Redfin's blog, complete with a market rankings, accounts of real bidding wars from Redfin agents and market-by-market statistics on offer strategies, click HERE.