Home-Buying Competition Picks up in January, Still a Far Cry from the 2013 Frenzy, According to Latest Redfin Bidding War Report

Record-low Supply of Homes for Sale Now Limiting Homebuyer Demand

SEATTLE--()--Redfin (www.redfin.com), the technology-powered real estate brokerage, today released its January 2014 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.

Bidding wars across Redfin’s 22 markets increased in January for the first time since the peak of the 2013 home-buying frenzy in March 2013. Redfin agents faced competition in 58.1 percent of offers they wrote in January, up from 52.8 percent in December but a far cry from the 70.4 percent recorded last year. January often brings a resurgence of bidding wars, after the holiday lull and as new homebuyers enter the market in the new year.

This lower level of competition is just another sign that limited supply and higher prices are hindering demand. Just after the number of homes for sale hit a four-year low in January, we reported a soft start to 2014 in terms of yearly growth in Redfin clients making offers. With home prices now 30.9 percent higher than they were two years ago, the allure of “getting a deal” has faded. And for those who are simply frustrated with a lack of inventory, patience may be a virtue. Redfin listing consultations and requests for real estate photography services indicate that things may begin to pick up. “In January, we saw a significant year-over-year decline in home photography and videography appointments,” said Matt Murphy, president of Boston Virtual Imaging, LLC. “But we’ve already had a distinct uptick in appointment requests for the second half of February, leading me to believe that sellers are just waiting a little longer this year to put their homes on the market.”

The report’s key findings include:

Multiple Offers

  • Month over month, competition increased across all markets covered in this report.
  • Chicago was the only market to see a year-over-year increase in competition, with 42.6% of offers facing bidding wars, up from 41% in January 2013.

Price Escalations

  • Across 22 markets, 22% of homes sold for more than the seller’s asking price, but the average home still sold for 0.9% below the list price.
  • San Jose and San Francisco were the only markets included in the report where the average home sold for more than its asking price. In San Jose, 53.3% of homes sold for higher than list price last month, with the average seller enjoying a premium of 2.9%. Meanwhile, 50% of San Francisco homes sold for more than their asking price, with the average purchase price being 2.1% above asking.

Competitive Strategies

  • Despite increased prevalence of bidding wars, all of the measured bidding war strategies were used less frequently in January than in December, except for all-cash offers. In January, 8.8% of successful Redfin offers were all cash, compared to 7.8% in December.

To read the full report on Redfin’s blog, complete with local market rankings, 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/2014/02/home-buying-competition-picks-up-in-january-still-a-far-cry-from-last-years-frenzy.html.

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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.com features all the broker-listed homes for sale, as well as for-sale-by-owner properties that don’t pay brokers a commission. Redfin also offers online tools that make the entire process of buying or selling a home easier and more fun. 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.

Contacts

Redfin Journalist Services
Rachel Musiker, 206-588-6863
press@redfin.com

Home-buying competition picks up in January, still a far cry from the 2013 frenzy, according to latest Redfin Bidding War Report. (Graphic: Business Wire)

Home-buying competition picks up in January, still a far cry from the 2013 frenzy, according to latest Redfin Bidding War Report. (Graphic: Business Wire)

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Contacts

Redfin Journalist Services
Rachel Musiker, 206-588-6863
press@redfin.com