SAN FRANCISCO (KRON) — Bidding wars in the San Francisco real estate market were down in March compared to one year ago, according to a new report that suggests that homebuyer demand in the Bay Area and elsewhere is starting to cool. Bidding wars in SF had an average of 7.8 offers in March of this year, down from 10 in March of 2021, said the report from technology-powered real estate company, Redfin.
Bay Area city is most competitive housing market in US
San Jose remains the most competitive housing market in the US with a bidding war rate of 79.8%, putting it just above Boston, in second place with 79%. Rounding out the top five were Providence, RI at 78.3%, Worcester, MA at 78.2% and San Diego at 78.1%.
While the competition rate remains high in the pricey coastal markets, according to the report, there are signs that homebuyer demand in some of these areas is starting to ease. In San Francisco, as in other top markets like Los Angeles, Washington D.C., Boston and Seattle, Redfin agents have seen fewer buyers request service in the early part of this year.
“March was the first month in two years that I had a weekend with zero house tours. People are getting priced out,” said Maria Giron, a Redfin real estate agent in the Bay Area. “Some buyers are in shock and dropping out altogether. Others are looking at more affordable options like smaller homes or neighborhoods that are farther out.”
San Francisco, LA see drop in competition
In San Francisco and Los Angeles, the share of Redfin offers that faced competition was down month-over-month and year-over-year in March. San Jose, which tops US metro areas in competition, saw an increase month-over-month and year-over-year.
Nationwide, 65% of home offers written by Redfin agents faced competition on a seasonally adjusted basis in March, down from a revised rate of 66.7% in February, representing the first month-over-month decline since September. The report indicated that could be a sign that demand is starting to cool as soaring mortgage rates and housing prices prompted some buyers to back out of the market. An offer is considered part of a bidding war if a Redfin agent reports that it has received at least one competing bid.
The cost of housing remains high in the Bay Area and across the state. In some California cities, the value of a typical home has more than tripled. As the Redfin report states, the average 30-year fixed mortgage rate is now at 5.11%, the highest since 2010.