Redfin Bidding War Report Shows Home-Buying Competition Eased in May
Largest Monthly Inventory Increase in Three Years is Welcome News for Beleaguered Homebuyers in a Seller's Market
SEATTLE, June 10, 2013 /PRNewswire/ -- Redfin (www.redfin.com), the technology-powered brokerage, today released its May 2013 Bidding War Report. The report is based on Redfin's Offer Insights, statistics compiled from 2,000 offers written by Redfin agents in May of this year. Redfin uses this proprietary data to rank its most competitive real estate markets based on the percentage of offers written by Redfin agents that faced competition from other homebuyers.
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In May, 69.5 percent of offers written by Redfin agents faced competition. Still, shopping for a home was slightly easier for homebuyers in May than in April, when 73.3 percent of offers competed against multiple bids. The rate of competition was basically the same as May 2012, when 69.3 percent of Redfin offers went into bidding wars. The market's easing is likely a result of the substantial monthly increase in inventory seen in April. The number of homes for sale grew 6.4 percent from March 2013, the largest monthly gain since March 2010. Interest rates, which rose slightly in May, could also play a role in the declining demand seen last month.
Despite easing competition, seven out of 10 Redfin offers still faced multiple bids last month, causing homebuyers and their agents to use creative strategies, including:
- Why Did the Chicken Cross the Road?: The people who bought this $531,000 3-bedroom, 1.75-bath Seattle home were neck and neck with another top bidder, when their agent Trevor Smith helped them seal the deal by offering to adopt the seller's chickens himself.
- Win a Free Vacation if You Choose My Offer: The winning offer on a $685,000 3-bedroom, 3.5-bath home in Rockville, MD stood out among five competing bids because Redfin agent Kris Paolini's clients offered the sellers a free vacation at their home in South America.
- Whatever it Takes: Redfin listing agent Kurt Pepin thought a buyer's agent simply forgot to fill in the cap of the escalation clause in her offer on his $399,950 4-bedroom, 1.75-bath Kirkland, WA listing. When Kurt called her to find out what the cap was, she confirmed that she left it blank intentionally. The buyer was willing to offer whatever price it took to beat any other bid.
The Redfin May 2013 Bidding War Report's key findings include:
- Each of the nine markets on the list saw a lower rate of competition in May than in April.
- Four of the top five most competitive markets were all in California: San Francisco (87.9% of Redfin offers faced bidding wars), Los Angeles (86.1%), Orange County (83.9%) and San Diego (72.6%).
- Boston rounded out the top five with 68.1% of Redfin offers facing competition.
- San Diego and Orange County posting the largest month-over-month declines in May, seeing 16.4 and 10.3 percent drops in the percentages of Redfin offers facing bidding wars.
- Nearly half (49.0%) of Redfin's winning offers were higher than the asking price, a slight drop from 51.9% last month.
- Pre-inspections (a competitive strategy in which the buyer has the home inspected before submitting an offer so that they can safely waive the inspection contingency) are distinctly regional, included in 18.2% of Seattle offers, 3.3% of Washington DC offers, and 2.7% of Baltimore offers. Pre-inspections were not part of the winning offers in any other city.
The table below ranks the hottest real estate markets in order of competitiveness.
|
Market |
Percent of Offers that Faced Competition, May 2013 |
Percent of Offers that Faced Competition, April 2013 |
Percent of Offers that Faced Competition, May 2012 |
Percent of Winning Offers that Were Over Asking Price, May 2013 |
Average Difference Between Offer Price on Winning Offers & Asking Price, May 2013 |
|
87.9% |
90.8% |
84.9% |
96.8% |
9.7% | |
|
86.1% |
86.2% |
79.6% |
25.0% |
-0.6% | |
|
83.9% |
93.6% |
84.0% |
58.1% |
1.4% | |
|
72.6% |
86.9% |
70.8% |
60.9% |
0.1% | |
|
68.1% |
69.2% |
46.7% |
56.5% |
0.8% | |
|
67.4% |
74.6% |
74.2% |
60.6% |
3.1% | |
|
66.8% |
69.4% |
67.0% |
36.1% |
-0.3% | |
|
54.4% |
58.1% |
37.5% |
27.0% |
-0.7% | |
|
48.4% |
51.2% |
42.1% |
19.0% |
-2.6% | |
|
National |
69.5% |
73.3% |
69.3% |
49.0% |
1.4% |
To read the full report on Redfin's blog, complete with accounts of real bidding wars from Redfin agents and market-by-market statistics on offer strategies, click the following link. http://blog.redfin.com/blog/2013/06/redfin-bidding-war-report-2013-06.html.
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 $8 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World's Most Valuable Private Tech Companies by Business Insider. Follow us on our blog (blog.redfin.com), Twitter (@redfin), and Facebook (facebook.com/redfin), Redfin Collections (www.redfin.com/collections), and on our mobile apps (www.redfin.com/mobile).
SOURCE Redfin Corporation
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