The national median home price rose 14% year over year to $335,519 in November, according to Redfin, Seattle. And in many housing market hotspots, bidding wars persist for more than half of home sales.
The Redfin report (https://www.redfin.com/news/november-housing-market-update-14-pct/) said the huge jump in home prices marked the second-largest annual increase since at least 2012, bested only by a 14.5% gain in July 2013. These near-record gains are fueled by an extreme imbalance between homebuying demand and the supply of homes for sale. Closed home sales surged 23% from a year earlier, and pending sales were up 37%, while new listings increased by just 8%.
The said the housing market set multiple records in November for time on market, the share of homes sold above list price and the number of homes for sale. The rate of home price and sales growth are also both near their record highs, suggesting that November may be the hottest housing market on record.
“Neither the election nor the Thanksgiving holiday weekend curbed homebuyers’ appetite in November,” said Redfin chief economist Daryl Fairweather.
Median home prices increased in each of the 85 largest metro areas Redfin tracks.
Redfin also reported 53.6% of home offers written by Redfin agents nationwide faced competition in November. While that’s down from a revised rate of 58.5% in October, it represents the seventh straight month in which more than half of Redfin offers encountered bidding wars.
The San Diego metro area had the highest bidding-war rate of the 24 metros in this analysis, with 75.3% of Redfin offers facing competition, followed by Denver (66.7%), San Francisco/San Jose (65.8%) and Seattle (60.9%). Sacramento—the most popular destination for people looking to move to a different metro area—rounded out the top five, at 60.0%.
Justin Hess, a Redfin real estate agent in the Denver area, recently received 22 offers for a three-bedroom single-family home he listed in Thornton, Colo., a Denver suburb. The winning bidder ended up paying $35,000 over the $410,000 asking price and waiving their appraisal contingency.
“Single-family homes that are priced right, in good condition and in a desirable neighborhood are still selling quickly for top dollar,” Hess said. “If you’re a buyer, you had better bring your best punch and expect competition. People are paying a premium for the latest and greatest, updated, remodeled, turnkey homes.”
Some of the places with the highest bidding-war rates have also seen significant growth in new listings—one factor that’s allowing competition to flourish, Fairweather said.
“Buyers aren’t going to compete for homes that have been sitting on the market,” Fairweather said. “They will typically only get into a bidding war for a newly listed, desirable home that is move-in ready.”
Minneapolis had a lower rate of competition than any other metro area in this analysis, with 34.6% of Redfin offers facing bidding wars in November. Also in the bottom five were Chicago (36.4%), Tampa, Fla. (37.1%), Houston (37.3%) and New York (37.6%).