In Salt Lake City, one of the fiercest housing markets in the U.S., a September lull in competition offered false hope for home buyers as bidding wars came roaring back a month later.
In October, Utah’s capital led the country as the most competitive market, with roughly 80% of offers facing a competing bid, according to new data from Redfin on Wednesday. Across the U.S., bidding wars had been in steady decline since a peak in April, only to surge back or stay the same in many cities in October, dashing expectations that the fall and winter seasons would give buyers a break from the frenzied pace of home sales.
Nationwide, about 60% of offers faced bidding wars in October, unchanged from September—though some of the most in-demand cities, such as Salt Lake, have seen competitiveness rise all over again.
“The latest home-buying demand data indicated it may be heating back up this month—a sign that bidding wars could start to tick up again,” said Daryl Fairweather, Redfin’s chief economist.
Much of the competitiveness is concentrated in inventory-starved Western states, especially in California. Sacramento, which has seen an influx of transplants from the Bay Area in recent years, logged the second-most competitive market, with 77% of bids facing a competing offer, an increase from September. San Diego, California, and San Francisco were also in the top five areas facing bidding wars—which bodes poorly for buyers who held off in the spring waiting for an opening in the market.
An uptick in buyers looking to lock in mortgages before interest rates rise is fueling some of the increase in activity, said San Diego Redfin agent Jodie Lee.
“There’s been a noticeable uptick in bidding wars during the first couple weeks of November, and we’re seeing a lot more buyers than we typically would at this time of year,” Ms. Lee said in the report.
In Indianapolis, three in four bids faced off against other offers, making it the third most competitive U.S. city in October, according to Redfin, which tracks 42 metros.
Meanwhile, bidding wars have also intensified in Dallas, Honolulu, Seattle and Colorado Springs, Colorado. In Milwaukee, the percentage of bids facing competing offers more than doubled from September to October.
“Home buyers who dropped out of the housing market in the spring have returned under the assumption there will be less competition,” Ms. Fairweather said. “They may be surprised to discover that bidding wars are still common because so many house hunters are looking to take advantage of low mortgage rates before they rise.”
Some cities escaped the rebound in competition last month. Most notably, hot market Las Vegas saw bidding wars drop significantly in October, with less than half of bids facing another offer. Miami also recorded a small down tick, as did Charlotte, North Carolina, as well as Phoenix and Tucson, Arizona.