Home-Buying Competition Continued its Steady Decline In October According to Redfin Bidding War Report

SEATTLE, Nov. 20, 2013 /PRNewswire/ -- Redfin (www.redfin.com), the technology-powered real estate brokerage, today released its October 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.

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In October, 55.9 percent of offers written by Redfin agents faced bidding wars, down from 58.3 percent in September. This is was the seventh month in a row that Redfin reported a month-over-month drop in competition. October also was the third consecutive month to see competition fall below 2012 rates.

As predicted in last month's Bidding War Report, competition continued to soften in October amidst the U.S. government shutdown and plummeting consumer confidence. Despite the uncertainty in the overall economy, overall homebuyer demand in October was actually more robust than expected. This unexpectedly strong demand paired with dwindling inventory likely kept competition from falling even further in October.

"In welcome news for buyers, bidding wars are nearing 2011 levels," according to Redfin economist Ellen Haberle. "This reprieve is unlikely to last much longer; as soon as the clock strikes midnight on New Year's Day, competition probably will reverse course as the 2014 selling season takes off."

The report's key findings include:

Multiple Offers

• Competition declined the most in Boston, with 61.3% offers facing bidding wars in October, down from 70.1% in September.
• San Diego became more competitive in October, with 63.0% of offers going up against multiple bids, compared to 56.1% in September.

Price Escalations

• Chicago buyers enjoyed the greatest negotiating power in October, when home sale prices represented, on average, a 4.9% discount from the seller's list price.
• San Francisco was the only market among Redfin's most competitive where purchase prices averaged higher than asking prices, with the typical home sale registering a 1.4% premium.
• San Francisco and San Jose were home to the largest percentages of sold homes with price escalations, with 62.3% and 54.9% of homes selling above listing price, respectively.

Competitive Strategies

• Across the 22 markets, the prevalence of personal cover letters as a competitive strategy increased to 23.7% of successful Redfin offers, from 20.1% in September.
• San Diego was home to the highest percentage of all-cash offers, with 6.7% of Redfin's winning bidders paying all cash there. Los Angeles, with 6.3% of successful offers being all cash, was not far behind.
• In San Francisco, the strategies of waiving financing and inspection contingencies became more popular, with 19% of winning offers waiving the financing contingency in October, compared to 17.9% in September, and 19% waiving the inspection contingency, up from 10.7% in September.  

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 the following link. http://www.redfin.com/research/reports/real-time-bidding-wars.

About Redfin
Redfin (www.redfin.com) is a technology-powered real estate broker that represents people buying and selling homes. Founded and run by technologists, Redfin has a team of experienced, full-service real estate agents who are advocates, not sales-people, earning customer-satisfaction bonuses, not commissions. Redfin's online tools feature all the broker-listed homes for sale, as well as for-sale-by-owner properties that don't pay brokers a commission. The company serves 22 U.S. markets and has closed more than $13 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World's Most Valuable Private Tech Companies by Business Insider.

SOURCE Redfin