In one more indication that rising interest rates and replenished inventories are dampening hot markets, the Seattle online brokerage that coined the term “flash sale” reports that the percentage of multibid offers in the largely West Coast markets it tracks has fallen over the past three months.
In June, the percentage offers tracked by Redfin that were facing competition fell to 68.6 percent, down from 69.5 percent in May, and down from its peak of 75.7 percent in March. The average weekly 30-year fixed mortgage rate rose from 3.81 percent in late May to 4.46 percent as of late June, according to Freddie Mac. During that period, the number of Redfin’s home-buying customers taking home tours fell 1.9 percent and offers dropped 5 percent. Inventory has been climbing since April and saw a 17 percent year-over-year jump in May.
“I have noticed a marked change in competition just over the last few weeks,” said John Venti, a Redfin agent in Los Angeles, where still 86.1 percent of Redfin’s offers faced bidding wars last month. “Each of the last three offers I wrote was accepted without a counter-offer, which has been unheard-of in LA, where a home in a popular neighborhood has typically attracted 30 or 40 offers over the last several months.”
The housing market’s easing has not been felt evenly across the country, however. The Baltimore and Washington DC metro areas saw the largest month-over-month drops in the percentage of offers Redfin agents wrote that faced bidding wars, falling by 11.2 and 6.8 points respectively. Meanwhile, San Diego, Orange County, CA and Boston became more competitive from May to June, with bidding war rates increasing by more than 4 percentage points.
The table below ranks the hottest real estate markets in order of competitiveness.
| Competitiveness Ranking | Market | Percent of Offers that Faced Competition, June 2013 | Percent of Offers that Faced Competition, May 2013 | Percent of Offers that Faced Competition, June 2012 | Percent of Winning Offers that Were Over Asking Price | Average Difference Between Offer Price on Winning Offers & Asking Price |
| #1 | San Francisco | 89.7% | 87.9% | 83.8% | 92.1% | 9.3% |
| #2 | Orange County, CA | 88.6% | 83.9% | 84.3% | 45.5% | -0.7% |
| #3 | Los Angeles | 86.1% | 86.1% | 72.8% | 53.1% | -1.6% |
| #4 | San Diego | 81.9% | 72.6% | 80.2% | 39.3% | -3.2% |
RealEstateEconomyWatch.com » Competition Cools in Overheated Markets » Print.