Around 54% of aspiring homebuyers who submitted offers faced competition in November, according to a recent report from Redfin. That marks seven straight months where at least half of all offers submitted through Redfin agents were contested by other offers.
The good news is it’s a decline from October, which pegged the competition rate at 58.5%. But the flurry of competitiveness has been felt in the real estate market all year long.
The 5 Most Competitive Housing Markets
At the top of the list, San Diego had the most intense competition among buyers. Over 75% of all offers placed by Redfin agents were competed with by other buyers.
To round out the top five list was Denver (66.7%); San Francisco/San Jose, California metros (65.8%); Seattle (60.9%); and Sacramento, California (60%).
Denver-based Redfin agent Justin Hess recently received 22 offers for a 3-bed house he listed in Thornton, a suburb 10 minutes outside Denver. The winning bidder ended up paying $35,000 over the $410,000 asking price and waived their appraisal contingency.
“Single-family homes that are priced right, in good condition, and in a desirable neighborhood are still selling quickly for top dollar,” Hess said. “If you’re a buyer, you had better bring your best punch and expect competition. People are paying a premium for the latest and greatest, updated, remodeled, turnkey homes.”
Daryl Fairweather, Redfin’s chief economist, went on to explain that steep competition has amounted to an increase in the number of new listings coming on to the market.
“Buyers aren’t going to compete for homes that have been sitting on the market,” Fairweather said. “They will typically only get into a bidding war for a newly-listed, desirable home that is move-in ready.”
It’s a counterintuitive sentiment, as many in the industry have pegged low inventory as the primary reason for the wave of competitiveness and price appreciation. The fact is, interest in buying shows little sign of easing up, and as such, competition will remain for the foreseeable future.
The 5 Least Competitive Housing Markets
Some markets experienced significantly less competition than others in November, with the bottom five well below average. Minneapolis came in last, reporting that just 34.6% of offers were competed with. The next four were Chicago (36.4%); Tampa, Florida (37.1%); Houston (37.3%); and New York (37.6%).
Beyond specific markets, condominiums as a whole felt the least competition. Redfin reports that 38.3% of condo offers were contested, compared to 48.7% with townhouses and 57.3% for single-family homes.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.