Across much of the country, the pandemic era of frenzied offers and waived inspections is fading, replaced by a slower, more cautious housing market. Yet in California, from Silicon Valley to Los Angeles, buyers are still lining up, outbidding one another and treating list prices as a starting point rather than a ceiling. The national cooldown has not fully reached the Pacific coast, and the gap between California and the rest of the United States is widening.
I see a split-screen market emerging: in many regions, higher mortgage rates and affordability limits are draining the urgency out of home shopping, while in California, scarcity, tech wealth and disaster-driven displacement are keeping competition alive. Understanding why bidding wars are ebbing almost everywhere else but not in this state helps explain where prices may head next and who will be left on the sidelines.
National bidding wars cool as buyers pull back
Across the broader housing market, the intensity that defined the early 2020s is clearly easing. Data on offers shows that the average number of bids per home has slipped to just under three in at least one Northeast city, a sign that multiple-offer situations are no longer automatic and that some properties are attracting only a handful of serious contenders. But the latest numbers there capture a broader national mood: buyers are more selective, and sellers can no longer assume a stampede the moment a listing goes live.
Part of that shift reflects a sharp rise in homes quietly leaving the market. In September 2025, more than 84,000 properties across the entire United States and were delisted, a 28 percent jump that signals many owners would rather wait than cut prices. That retreat, combined with high borrowing costs, has drained some of the urgency from buyers who remain in the hunt. Even where competition persists, it is often less frenzied than during the peak of the pandemic boom, with fewer all-cash offers and more contingencies creeping back into contracts.
California’s structural squeeze keeps competition alive
California is the glaring exception to this cooling trend. The state’s chronic shortage of homes, especially in job-rich coastal metros, means that even a modest number of active buyers can ignite intense competition. In earlier data, bidding wars had already fallen to an eight year low nationally, yet Despite that cooling, bidding wars remained the norm in hot California, Boston and D.C. zip codes, with Thirty two percent of offers still facing competition. That pattern has persisted, with the state’s inventory problem proving stubbornly resistant to higher rates or economic uncertainty.
Analysts who track the state’s market describe a simple equation: Intense competition for a small inventory of homes keeps prices elevated and bidding wars common. One review of the market noted that Intense demand collides with limited supply, so even as bidding wars decline nationally they remain high in California. That imbalance is especially acute in coastal counties where zoning limits new construction and where high paying industries cluster, leaving buyers to fight over a narrow slice of available homes in places like California’s tech and entertainment hubs.
Silicon Valley’s tech money and fire risk supercharge prices
Nowhere is the disconnect between national cooling and local heat more visible than in Silicon Valley. High mortgage rates are sidelining most of the country’s potential homebuyers, but High borrowing costs do not mean much to Silicon Valley’s tech workers, whose stock based wealth and high salaries allow them to keep bidding aggressively. In Santa Clara County, one analysis found that the supply of homes was about a fourth of what it should be, a shortfall that helps explain why even modest properties can spark bidding wars.
The result is a market where a 1,100-square-foot, 102-square-meter house can attract a crowd of buyers and sell far above asking. Reporting from Silicon Valley describes buyers lining up for small, aging homes that would be considered starter properties elsewhere but trade for millions locally. In one fire prone area, a Feb report noted that a 2020 fire destroyed more than 900 homes and left the wildland urban interface at risk, yet buyers still compete for $4 million fixer uppers in the same region. That willingness to pay for risk exposed properties underscores how deep the demand pool remains.
Even as some tech workers left the region during the pandemic, those who benefited from soaring company valuations and initial public offerings kept fueling demand. One account of the Even hotter segments of the Bay Area described list prices as almost meaningless, with buyers routinely offering far above the asking figure to secure a home. That culture of overbidding has not disappeared, even as other regions adjust to a slower, more rate sensitive market.
Los Angeles: celebrity cachet and wildfire displacement
Further south, Los Angeles is experiencing its own version of this split reality. The Los Angeles real estate market is described by local agents as a nightmare for buyers and renters, with competition spilling over from for sale homes into rentals. Los Angeles renters report that There are even bidding wars for ordinary apartments, a dynamic more commonly associated with luxury listings. That pressure reflects both limited construction and the city’s enduring draw for entertainment workers, influencers and remote professionals who want to live near the industry’s core.
Recent wildfires have intensified that squeeze. The Los Angeles wildfires displaced thousands of people, leading to a surge in demand for rental housing and a wave of bidding wars in neighborhoods that were not directly damaged. The Los Angeles rental market has seen displaced homeowners competing with existing tenants for a limited pool of units, pushing prices higher and eroding any sense of relief from the national cooldown. On the ownership side, a viral video shot in EVERYONE in LA’s luxury corridors shows crowds of would be buyers touring the same house, many drawn by the cachet of celebrity owned properties. That mix of disaster displacement and aspirational buying keeps the city’s market running hot even as other metros catch their breath.
On the ground, agents describe scenes that would feel familiar to anyone who shopped for a home in 2021. A social media post from early Jan shows lines of buyers outside open houses in Los Angeles, many of them chasing the same handful of listings. Another thread on a real estate forum bluntly states that the Los Angeles market is a nightmare, with renters and buyers alike losing out repeatedly. There is little sign, in those anecdotes, that higher rates alone are enough to cool demand in one of the country’s most supply constrained cities.
Bay Area bidding wars stretch from mansions to starter homes
Back in the Bay Area, competition is not limited to tech heavy suburbs. In affluent enclaves, multimillion dollar mansions are still selling well over asking price, with agents describing Bidding wars that push prices far beyond what sellers initially expected. One local report framed the question as Why Bay Area mansions keep attracting multiple offers, pointing to deep pockets among buyers and a limited number of trophy properties. That dynamic means luxury sellers can still expect a crowd, even as mid tier markets elsewhere see fewer showings.
The frenzy extends to more modest neighborhoods. In one widely shared example, a home in Berkely sold 78 percent above list price, a figure that stunned even seasoned observers. A discussion thread about that sale noted that buyers in Berkely and Oakland need experienced agents to navigate a market where underpricing is a deliberate strategy to spark bidding wars. Another commenter shared a Nov anecdote about buyers writing personal letters and waiving contingencies just to stand out. Those stories align with broader research showing that Bidding wars have become synonymous with post pandemic markets for starter homes, with investors and first time buyers often chasing the same limited inventory.
Even outside the most expensive enclaves, Bay Area buyers describe a sense that list prices are merely an opening bid. One detailed account of buying in the region explained that Even
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*This article was researched with the help of AI, with human editors creating the final content.
Elias Broderick specializes in residential and commercial real estate, with a focus on market cycles, property fundamentals, and investment strategy. His writing translates complex housing and development trends into clear insights for both new and experienced investors. At The Daily Overview, Elias explores how real estate fits into long-term wealth planning.
