The one thing consistent across the housing market board this past couple of years has been that tight inventory has led to strong competition for houses. But where exactly are the most and least competitive markets in the country?
A new report by Redfin found the most competitive markets in the West, while the least is a grab bag of metros mostly throughout the South, Southwest, and Midwest.
Fremont and San Jose, California, and Seattle are the most competitive U.S. cities for homebuyers, according to the Redfin Compete Score. The score ranks markets on a scale of 0 to 100 for competitiveness level and ranked there three metros as solid 100s.
Apart from Aurora, Colorado, and Boston, all the markets with scores above 90 were cities in California or Washington. The common denominator for these states is tech companies.
“Many of the most competitive cities are tech hubs that have attracted an influx of people moving to the area for jobs, unmatched by the creation of new homes,” said Taylor Marr, Senior Economist at Redfin. “This has led to intense competition and rising home prices. In San Francisco, Seattle, and Denver homes have become so expensive that many people are moving elsewhere in search of more affordable and less competitive housing markets.”
According to Redfin, some homes in these markets are closing for as much as $150,000 above asking price.
For those looking at less cutthroat housing markets, there's New Orleans, the country's least competitive, according to Redfin. The Big Easy scored a 43 on the Compete Score. Three other cities, El Paso, Pittsburgh, and Miami, also had competitiveness scores in the 40s.
Caren Morgan, a Redfin agent in New Orleans, said she often works with people relocating to New Orleans, who are relieved to find homes with much less drama.
“That said, bidding wars aren’t uncommon, especially in the hottest parts of the city,” Morgan said. “But we typically see two or three competing offers, and they rarely go much above the asking price.”
Redfin also broke down competitiveness in neighborhoods. The most competitive neighborhoods are in Seattle, where several areas earned a 100 score.
Two neighborhoods, in Poipu, Hawaii, and West Palm Beach, Florida., scored a 1. These noncompetitive markets are among the most high-end properties in the country.