Competition for homes decreased in August for the fifth month in a row according to data compiled by the Redfin Research Center.
The report concluded that the diminishing number of bidding wars indicates that the housing market is shifting away from one that favors sellers toward a more balanced environment.
“Tight inventory conditions mean that across Redfin’s 22 markets, most customers making offers at the end of the summer faced competing bids,” Redfin said in a report accompanying the data. “ In August, 60.5 percent of offers written by Redfin agents across the country faced bidding wars, a drop from 63.3 percent in July and from 63.5 percent in August 2012. This was the first year-over-year drop in competition seen since Redfin began collecting this data in 2011.”
California had the most competitive markets according to Redfin, with San Francisco showing competition for 84.7 percent of homes, Orange County with 81.8 percent, and Los Angeles with 79.2 percent.
Bidding dropped most dramatically in Baltimore, where 29.8 percent of homes faced bidding competition in August versus 50.0 percent in July. In the 22 markets surveyed by Redfin, competitive bidding occurred in 60.5 percent of home sales nationally, down from 63.3 percent in July.
“Lower mortgage rates this month could spur a slight boost in bidding wars in October,” the report said. “Mortgage rates began to ease in mid-September in reaction to the Federal Reserve’s decision to keep its stimulus program unchanged. As a result, Redfin agents in some markets reported a swift reaction among buyers.”
By Hugh Moore