It’s been clear for quite some time that there’s a serious shortage of available housing on the market. In fact, the most recent data suggests that inventory is 30-40% lower than it would be in a healthy housing market.
And that shortage of houses available for sale is leading to some stiff competition among buyers who are going above and beyond the norm when they find a house they want in the neighborhood they want.
Paying above asking price, waiving contingencies and engaging in bidding wars are all becoming more prevalent in certain areas. But there are a few areas where these actions are becoming commonplace.
So, which neighborhoods are the hottest of all? Redfin dug into the data and determined which neighborhoods were the ones where buyers would do whatever it takes to get the house they want.
In these neighborhoods, homes sell at asking price or above and fly off the market, often in less than two weeks.
According to Redfin, the hottest neighborhood of 2019 was the White Oaks neighborhood in San Carlos, California, which is part of the San Jose metro area.
That area had a Redfin Compete Score of 95.5. According to Redfin, the compete score determines how difficult it is to win a home in an area using a combination of Redfin data and data from the multiple listing services.
Compete score is primarily calculated based on the number of competing offers, waived contingencies, sale-to-list ratio and number of days on market.
Basically, the higher the compete score, the more competitive the market is. And White Oaks takes the cake in that regard.
According to Redfin, the average home in White Oaks sold for 105.9% of its asking price in 2019. And the sales price is nothing to sneeze at. Redfin data shows that the median sales price in White Oaks was $1.835 million in November, nearly $800,000 more than the median sales price of the San Jose metro area.
Homes in White Oaks stayed on the market for only an average of 12 days in 2019, and 72.2% of the homes in the neighborhood sold for above asking price.
Next on the list is the Alger Heights neighborhood in Grand Rapids, Michigan, with a compete score of 95.3, just below White Oaks.
In Alger Heights, homes sell for 102.9% of their asking price, and stay on the market for just seven days.
But it should be noted that the price point in Alger Heights is significantly below White Oaks. In Alger Heights, the median sales price is $182,000, which is actually more than $25,000 below the median sales price of the Grand Rapids metro area.
Coming in third on the list was East Arlington in Arlington, Massachusetts, which is part of the Boston metro area.
In East Arlington, homes sell for 103.6% of the asking price and stay on the market for nine days. Homes in that neighborhood also sell for well beyond the rest of the Boston metro area, $770,000 in East Arlington compared to $490,000 for Boston.
And, without further adieu, here is the full list of the 20 hottest neighborhoods in the U.S. in 2019 courtesy of Redfin:
Click to enlarge. Data courtesy of Redfin
“While neighborhoods in the Bay Area and Boston are still among the most competitive in the country, robust competition for homes in Grand Rapids, Minneapolis and Tacoma neighborhoods 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 because they can make higher offers than local residents when they sell their previous homes.”