MReport February 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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M R EP O RT | 39 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Bidding War Rate Hits 'True Bottom' Fewer than one out of every 10 homes faced competition. A report from Redfin painted a bleak picture of the current state of the bidding war rate in the current real estate market, as the bidding war rate plummeted to its lowest rate in an entire decade during December 2019. Fewer than one out of every 10 home offers saw any competition when it came to vying for ownership. This does not bode well for the market, leading experts to fear that bidding wars may have truly reached rock bottom. What is worse, this epidemic appears to reach across the entire nation, with lackluster statistics in the bidding wars being posted across the board. According to Redfin, just 9% of the company's offers placed for their clients were involved in a bidding war during December, a decidedly unimpressive percentage that fell from the 12% that was posted just a single year prior, which also happened to set a disappointing record low for the decade. A glimmer of hope on the horizon is shared by experts who look toward a likely rise in this bidding war rate, its timed arrival directly coinciding with warmers temperatures of spring. These experts are clearly hoping that the bidding wars will likewise begin to heat up. Amid the rest of the anemic and non-competitive market areas, a small spark shone via San Francisco, California, which was the only competitive market during December. Although down from its previous 35% posted last year in December, San Francisco still saw a bidding war rate of 26% this past month, after falling 2 percentage points from the November 2018 rate of 28%. Redfin's San Francisco Market Manager Saleem Buqeileh had this explanation regarding the statistics: "There aren't typically very many homes for sale in San Francisco in December. Last month, we saw more buyers than usual out looking for a 'steal' and bidding on homes, which led to multiple offer situations on some homes where all of the buyers came in below list price, rather than above." "Bidding war rates likely hit their true bottom in December. Amid the current global economic uncertainty, mortgage rates will remain low in the coming months, which will boost demand for homes in 2020," Redfin Economist Daryl Fairweather said. "That means more buyers competing against each other and bidding up prices."

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