We know that today’s housing market is highly competitive. But if you’re buying or selling your house, that’s not enough — you need to know just how competitive it is in your neighborhood so you can understand what it takes to win a home, or what to expect when you’re selling. We’re here to help!
Today Redfin launched Compete Score™, designed to rate how competitive a city or neighborhood is on a scale of 0 to 100, where 100 is the most competitive. Like Redfin’s Walk ScoreⓇ, Compete Score is broken up into four ratings with accompanying score ranges:
More Data, Unique Insights
When it comes to the housing market, competition and desirability are not the same thing. In fact, desirable neighborhoods may be less competitive because they are more expensive and receive fewer offers. The best way to understand competitiveness in an area is to understand how many offers you’ll compete against, how strong your offer terms need to be and how quickly you need to act.
We calculate Compete Score using data that only Redfin has, including the number of competing offers and number of waived contingencies, and data from local multiple listing services (MLS), including the sale-to-list price ratio and number of days on market for homes in that area. Because Redfin has a customer database that is used by every agent for every customer at every step of buying or selling a home, we’re able to use our own data and unique insights to to deliver a more informed assessment to customers who want to understand competition in their market.
The Full Picture on Competition
One of the biggest questions for a prospective homebuyer is, “what does it take to win in this area?” That’s why we’ve included Compete Score on the Market Insights page alongside Redfin Agent-written Offer Insights, which provide insider details about recent offers made on homes in that area, as well as recently sold listings that may be similar to the home they are hoping to buy. Buyers and sellers can not only see a unique score that helps them understand and compare competition in different areas, they also get a comprehensive picture of competition in any given market.
Fewer Surprises for Buyers and Sellers
Compete Score is designed to be a valuable tool for customers in the buying or selling process. By knowing how likely they are to face competition in a given area, a buyer will be able to better understand if and how much they need to bid over list price, whether they need to consider waiving contingencies and how fast they need to act. That means fewer surprises, especially in a competitive market such as San Francisco or Denver or Seattle, where buyers can often be disappointed by being outbid when they didn’t expect it. For sellers, Compete Score helps them understand how long a home could take to sell, whether it’s likely to sell for above or below list price, and how to list the home at a price that’s likely to attract multiple offers.
A New Way to Report on Housing Market Trends
While Compete Score can help a homebuyer making an offer on their next home, it’s also a useful tool to better understand broader trends, such as which areas are the most and least competitive, how they compare to nearby areas and how competition is shifting over time. We released our first Compete Score Report today and plan to release this report on an ongoing basis in the future. Among U.S. cities with populations of at least 200,000, the report finds that the most competitive cities are Fremont and San Jose, Calif. and Seattle. The least competitive large cities are New Orleans, LA and El Paso, TX. For the complete list of the most and least competitive cities and neighborhoods, click here to read the full report.
For anyone who is looking to buy or sell a home, we hope that Compete Score, alongside all of our tools for buyers and sellers, can make the chaos of a competitive housing market just a little bit easier to navigate.
At launch, the Redfin Compete Score is available via our website for all cities and neighborhoods that have at least 25 homes sold in the past 12 months. We expect to launch the Redfin Compete Score on the Redfin app on both iOS and Android in the coming year.
We’ll update our accuracy measurements for Compete Score at the beginning of every month.