We’ve talked a lot this year about the great tech migration and how the influx of tech companies, tech workers and tech money is affecting the real estate market in places like Portland, Seattle, Denver and Boston. It should be no surprise that major tech hubs were home to some of the fiercest bidding wars this year, but even we were taken aback when we crunched the numbers to find the nation’s most competitive neighborhoods for homebuyers in 2015.
The 30 most competitive neighborhoods of 2015 were all located in just four cities: Boston, Portland, San Francisco and Seattle. The rankings are based on several indicators of competition, including the percentage of homes that sold above asking price, how quickly homes went under contract and the percentage of Redfin offers that faced bidding wars (Complete methodology below).
So where did homebuyers face down the most competition for homes? In Inman Square, just outside of Boston in Cambridge, 96 percent of offers written by Redfin agents faced bidding wars. Homes stayed on the market for a median of just seven days and 38 percent of homes sold to cash buyers. With a Walk Score of 94, the neighborhood is centrally located and attracts buyers with its classic New England feel and proximity to Harvard.
Trying to find a home in these competitive neighborhoods was no joke for buyers.
“It’s incredibly rare for a home in Cambridge not to get multiple offers. Offering over list price, waiving contingencies – buyers are doing everything they can to compete,” Boston Redfin agent Katie Gustafson said. “My clients recently won a bidding war in Washington Square (Ranked 26th) by agreeing to let the sellers rent their home back for free for two months after closing, giving them a nice cushion to move out of the home and get settled into their new place.”
Neighborhoods near MIT and Harvard, including Inman Square and Brighton/Allston, are definite hot spots. “About 80 percent of my clients work in the medical, pharmaceutical, R&D or engineering fields related to the universities and hospitals in the area,” Gustafson said.
Here’s a look at the 30 most competitive neighborhoods of 2015:
That’s not to say that homebuyers in other cities didn’t face down bidding wars, cash buyers and escalating prices. Neighborhoods in Denver, Chicago, Los Angeles and Washington, D.C., were rife with competition. Here’s a look at the most competitive neighborhoods in some of the major metro areas Redfin serves:
Which neighborhoods will be most competitive in 2016? Next month, we’ll publish our Hottest Neighborhoods in 2016 report, an analysis of Redfin.com user activity data and local Redfin agent insights to look ahead at which neighborhoods will heat up in the new year.
Methodology: To determine the rankings we analyzed seven factors in 30 metro areas where Redfin has transaction and offer data. The rankings were based on transaction data from multiple listing services, public records data, and Offer Insights by Redfin agents in 30 major metropolitan areas. Each factor was given equal weighting. Neighborhoods must have had at least 50 home sales during 2015 to be included and we included only metro areas where Redfin has sufficient Offer Insights data. Only condo, single-family home and townhome sales were included. We controlled for the overlapping or duplication of neighborhoods.
- Year-over-year median sale price growth
- Percentage of listings that sold above asking price
- Median days on market
- Average ratio of sale price to list price
- Percentage of sales that were all cash
- Percentage of Redfin offers that faced bidding wars
- Average number of competing offers Redfin agents faced in aforementioned bidding wars
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