Home buyers in San Diego are more likely to face competing offers than other parts of the country, according to a new study.
Real estate website Redfin said 72% of properties in the San Diego metro area received multiple offers in November, making it the third most competitive market in the nation. Only Richmond Markets. Va., where 80% of properties received multiple offers, and Salt Lake City with 73.8% rank higher.
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Redfin’s data is based on homes that received at least one competing offer. This means buyers in San Diego are very likely to bid above the asking price. and continue to drive prices up.
The data is a bit limited as it is only based on homes that Redfin has listed through its agents, but it is unique in that most stories about competing offers are anecdotal from real estate agents and do not are tracked in any formal database.
Daryl Fairweather, chief economist at Redfin, said the data is valuable because it lets potential buyers know how quickly they should make an offer, how prepared they should be and whether they should be ready to bid at the above the asking price.
“As a (San Diego) homebuyer,” she said of interpreting the data, “there’s a good chance I’ll increase the amount of money I’m offering to get home.”
San Diego is California’s most competitive market in the study. About 68% of buyers encountered a competing offer in San Jose and San Francisco; In Sacramento, 67.5%; and in Los Angeles, 58.4%.
No metro included in Redfin’s data was spared from competing bids, highlighting a strong housing market across the country. Still, the places where buyers were least likely to face stiff competition were Jacksonville, Florida, with 33.3% of homes receiving competing offers, and Indianapolis, with 36.8%.
National house prices rose 19.5% year on year in September, according to the S&P CoreLogic Case-Shiller indices. Metro San Diego (which includes all of San Diego County) outperformed the national average, growing 25%.
Jan Ryan, a Ramona-based RE/MAX agent, said she’s not surprised San Diego County is one of the most competitive markets because every home she lists receives multiple offers.
“If you don’t get multiple offers, you’re probably doing something wrong,” she said.
Ryan said she recently found herself with six bids above asking for an 1,824-square-foot, four-bedroom home in Ramona after four days on the market. The home was listed at $659,000, but three bids were over $700,000 and the highest was $710,000.
This ad had a very atypical conclusion: the seller was at the house when one of the potential buyers viewed the property, decided they liked them, and sold the house for a lower price of $695,000.
While it’s unclear if this will last, competition is slowing in San Diego County, according to data from Redfin. He said 80.4% of households were receiving competing offers in November 2020, up from 72% now.
Fairweather said there’s a good chance things will remain competitive going into 2022, but expected mortgage rate hikes will likely slow things down.
“If mortgage rates go up, people will have to pay more on their monthly mortgage,” she said, “and be much less willing to go down the road of a bidding war. to pay for what they cannot afford.
Low mortgage rates and a limited number of homes for sale continue to drive up prices. San Diego County’s median home price — including single-family homes, townhouses and condos — hit a record high of $750,000 in November, CoreLogic data shows.
Fairweather said prices are unlikely to fall in 2022, but the pace of increases should slow. She said that even if the domestic domestic market has a big slowdown, San Diego will likely remain a hot market.
“San Diego is a beautiful place to live,” she said. “I can’t imagine people are going to stop wanting to move there and buy a house.”