Nationally, only 16% of offers made by Redfin agents on behalf of their home-buying customers faced a bidding war in May. However, San Francisco proved itself to be the most competitive housing market with a whopping 35% of offers facing a bidding war, according to company.
Redfin attributes this growth to the rising presence of IPOs in San Francisco’s tech-savvy housing market.
This year, both Uber and Lyft, which happen to headquartered in San Francisco, announced they were going public. Since then, their IPOs have driven home prices upward and created an influx of potential homeowners.
“Earlier this year, the San Francisco housing market appeared to be running out of gas, but the recent tech IPOs have reignited competition,” Redfin Chief Economist Daryl Fairweather said. “Buyers want to get in now before prices shoot up, while many would-be sellers are holding out for higher prices. With more people looking to buy homes than there are homes for sale, what you have is a recipe for bidding wars.”
Redfin agent Miriam Westberg said bidding wars are back with a fury in San Francisco.
“We’ve seen as many as 33 offers on one property recently, and most offers have no contingencies or are all-cash offers substantially higher than the list price,” Westberg said. “A few recent buyers have been surprised by how much competition they faced when they submitted their first offer since they heard about the slowdown at the end of last year. But it just takes that one failed offer for most to realize what they are in for.”
The image below highlights the percentage of bidding offers made in West Coast markets:
NOTE: Redfin’s analysis is based on home offer and purchase data gathered from thousands of Americans that bought homes with Redfin agents over the past five years.