Bidding wars became more common in San Diego in November, according to Redfin’s November 2013 Real-Time Bidding War Report based on the company's Offer Insights, which is statistics compiled from thousands of offers written each month by Redfin agents for their home-buying clients.
Offers facing bidding wars increased by 5.7 percent to 66.2 percent of offers in San Diego in November from October; 10.8 percent of properties sold over the asking price, but the average sale-to-list-price difference was -3.4 percent.
Nationwide, in November, competition for homes hit its lowest point since 2011, with 51.7 percent of Redfin offers facing bidding wars, down from 54.8 percent in October and from 63.6 percent a year earlier. Nationally, the home-buying competition rate has now been declining for eight straight months after peaking at 75.3 percent in March. Even though bidding wars are becoming less common, demand from homebuyers has been stronger than expected for the end of the year. Redfin agents report that this season's homebuyers are extremely motivated to get a home under contract before the end of the year, knowing that competition may increase in the new year.
"Homebuyers who failed to get an offer accepted early in the year have been stockpiling down payment money all year long," said Amber Hancock, manager of Redfin's San Francisco East Bay market. "They're jumping back in this time as better qualified, more confident competitors, taking advantage of the easing late-fall market."
Despite fewer bidding wars, competitive strategies including all-cash offers, waived financing and inspection contingencies, and personal cover letters were used more often in November than in October.
The cover letter saw the most dramatic late-season increase as a winning offer strategy, with 35.9 percent of Redfin clients' winning offers including a cover letter in November, compared to 23.7 percent in October. In traditionally competitive Orange County and San Francisco, cover letters were included in the majority of winning offer packages.