According to new research by Redfin, the San Francisco Bay Area neighborhood White Oaks is the most competitive neighborhood of the year for homebuyers. Alger Heights in Grand Rapids, MI and East Arlington in Boston rounded out the top three competitive neighborhoods.
"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."
Of the 10 Bay Area neighborhoods among the most competitive in the country, half are in Oakland. Although the median sale price in Oakland is more than double the national median--$720,000 versus $312,000 for the typical home in the U.S. in November--it's still well below that of San Francisco ($1.4 million) and San Jose ($1.1 million).
Oakland Redfin agent Katy Polvorosa said the area has been particularly hot this year, partly because it's more affordable than neighboring parts of the Bay Area.
"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. Homes that are move-in ready and priced right typically receive offers within 12 to 14 days. The Oakland market is so hot that sellers are still expecting and receiving offers that waive contingencies."
Although the Bay Area is still home to plenty of competitive neighborhoods, homebuyers are gravitating toward more affordable inland metros as housing markets in coastal job centers have become more expensive. In the third quarter of 2019, 26% of Redfin.com home searchers looked to move to another metro area, with affordable places like Sacramento, Phoenix and Las Vegas as popular destinations.
The appearance of two neighborhoods in Grand Rapids on this year's ranking of most competitive neighborhoods is an example of the trend of migration away from more expensive metros.
"Affordability plus quality of life are big draws to the Grand Rapids area. I've worked with buyers from Chicago, California, Hawaii and other expensive parts of the country who are looking here because they can get so much more bang for their buck," said local Redfin agent Shellie Silva, who moved to Grand Rapids from San Diego three years ago. "Homes in neighborhoods with price points below $275,000, like Alger Heights and Creston, are prone to bidding wars and they tend to sell quickly because they're even more affordable that some other parts of Grand Rapids."
In Alger Heights, nearly 67% of homes sold for above list price and the typical home was on the market for one week before going under contract so far this year. And in Creston, 59.3% of homes sold for above list price and the typical home went under contract in just six days.