Monthly Increase in Inventory Eases Competition for Homes in May
By: Esther Cho
Competition for homes eased in May due to a monthly increase in inventory, according to Redfin’s latest bidding war report.
Although 69.5 percent of offers that came from Redfin agents faced competition last month, the share is down from 73.3 percent in April. Compared to a year ago, competition was essentially unchanged after ticking up by just 0.2 percentage points.
Competition was the most heated in California markets, according to Redfin.
In San Francisco, 87.9 percent of offers faced multiple bids in May, the most out of the 21 major markets tracked. In Los Angeles and Orange County, 86.1 percent and 83.9 percent of offers faced competition, respectively.
Though, in Orange County, bids for the same property eased significantly, falling by nearly 10 percentage points from 93.6 percent in April.
San Diego also saw a significant decrease, with the percent of listings with multiple bids at 72.6 percent in May, down from 86.9 percent in April.
Bidding wars in competitive markets also led many buyers to pay above asking price, with 96.8 percent of winning offers in San Francisco above asking price. On average, winning bids in the metro were 9.7 percent above asking prices.
Out of all 21 markets examined, Redfin found 49 percent of winning bids were above asking price, with buyers paying about 1.4 percent more than the list price.
According to Redfin, winning offers shared certain traits. In May, 61.7 percent were financed with a conventional loan and 29.4 percent included a personal cover letter.
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