As the year comes to an end, real estate brokerage website Redfin has ranked the 20 most competitive neighborhoods of 2019, with one state dominating the most competitive housing market list and bidding wars at an all-time low.
California’s Bay Area neighborhoods made up half of Redfin’s list, with the White Oaks section of San Carlos, California, being the most competitive neighborhood on the year in terms of homebuyers, followed by Alger Heights in Grand Rapids, Michigan, at number two and East Arlington in Boston at number three.
Redfin reports that only 12 percent of housing offers, written by Redfin agents on behalf of homebuying customers across the U.S., engaged in a bidding war between January and November 2019, compared to 48 percent in 2018 and 53 percent in 2017.
While bidding wars have steeply declined nationwide, the same can’t be said for the Bay area, where 10 of the top 20 most competitive neighborhoods of 2019 reside.
Meanwhile, the Boston metro area is home to four of the top 20 most competitive housing markets, while Grand Rapids and Washington, D.C., come next, both with two apiece.
Elsewhere, suburbs of Minneapolis and Seattle, specifically Brooklyn Park and Tacoma, have one neighborhood each on the list as well.
The 2019 Redfin Compete Score rankings, which collects data on the number of offers made on a house or property, the number of waived contingencies, how fast a home is sold under contract and how much higher the list price is compared to the price it was sold, all help potential homebuyers to determine the difficulty they will face in successfully purchasing a home in individual neighborhoods and cities, according to Redfin.
To meet Redfin’s criteria, all of the top 20 neighborhoods on the list had to score above 90, meaning most, if not all, of the homes there received multiple offers, many with waived contingencies. In White Oaks, another Bay Area neighborhood, over 71 percent of homes sold above the initial listing price between January and November 2019. A typical home there was sold within 12 days, Redfin reports.
"Homes that are move-in ready and priced right typically receive offers within 12 to 14 days," Polvorosa said. "The Oakland market is so hot that sellers are still expecting and receiving offers that waive contingencies.”
Half of the 10 Bay Area neighborhoods on the list are located in Oakland. However, the average sale price in Oakland — $720,000 — is more than double the national average of $312,000. As expensive as homes in Oakland appear, they pale in comparison to the median sale prices in San Francisco and San Jose, which are $1.4 million and $1.1 million, respectively, according to Redfin.
Katy Polvorosa, a Redfin agent in Oakland, said the area has become particularly prime real estate this year, namely due to the fact that Oakland is one of the more affordable parts of the Bay Area and neighboring areas.
“While neighborhoods in the Bay Area and Boston are still among the most competitive in the country, robust competition for homes in neighborhoods in Grand Rapids, Minneapolis and Tacoma signals the desirability of more affordable areas,” said Redfin chief economist Daryl Fairweather. “An influx of buyers from more expensive neighborhoods contributes to competition in these affordable neighborhoods, especially if they can make higher offers than local residents when they sell their previous homes.”
As the Bay Area’s housing market continues to get more competitive, homebuyers are beginning to look towards nearby, and far more affordable, inland metro areas as coastal areas continue to rise in prices.
Other housing markets have benefited from the neighborhoods and areas on Redfin’s top-20 list. Redfin reports that in the third quarter of 2019, 26 percent of people using the website to search for homes ultimately looked to move to other, more affordable metro areas like Phoenix, Sacramento and Las Vegas.
The fact that two of the neighborhoods on this year’s list are in Grand Rapids further demonstrates the growing trend of homebuyers migrating away from the more expensive metro neighborhoods in favor of cheaper housing markets, according to Redfin.
“I’ve heard a lot of people say the Bay Area housing market is cooling this year, but I’m seeing the opposite in Oakland,” Polvorosa said. “I’m writing offers that are seeing aggressive competition."