A new Redfin report specifies that only 10% of all offers written by Redfin agents on behalf of their homebuying clients faced a bidding war in October, down from 39% the same time last year and now at a 10-year low. Not even a plunge in mortgage rates this year could attract new buyers.
Three of the top metropolitan area for bidding wars in October were located in California -- San Francisco (34.8%), San Jose (20.5%), and San Diego (15.6%). On the East Coast, most of the bidding wars across major cities were non-existent, except for Philadelphia (13.8%).
The rate of bidding wars across major metro areas in California have collapsed in the last 12 to 16 months.
For example, 50% to 85% of all Redfin transactions in San Francisco from 2017 through 2Q18 faced fierce competition among buyers. But as soon as summer rolled around, demand plunged, and so did the bids, as the bidding war rate crashed to near zero by 1Q19 -- but has since bounced back to 34.8% in October.
During the same period, the national bidding war rate plummeted, now making a new 10-year low at 10.1% last month.
Seattle's bidding war among homebuyers was just 8.8% of all transactions in October, well below the 10.1% national average, and also at a 10-year low.
"Homebuyers in Seattle know that in the current market, they don't necessarily have to go through the emotional heartburn that comes with bidding wars," said Seattle Redfin agent Jessie Boucher.
"Even though there aren't a ton of homes for sale right now, buyers are able to preserve their contingencies and maybe even get a great deal," Boucher said.
Redfin's report is a warning that homebuyers are beginning to recognize a possible housing market top.
Many homebuyers don't want to pay top dollar for homes that have seen rapid price inflation over the last eight or so years. Also, home prices have risen faster than wages over the same period, so it's possible that a structural high as been put in -- one where the average American can no longer afford a home, hence why fierce bidding has disappeared across the country.