Be prepared to spend when looking at competitive housing marketsDate posted: 1/27/15 01:15:00 PM
Seeking out competition is usually admired in fields such as athletics and academics, but it's not the brightest idea for prospective homebuyers to choose a competitive housing market. Competitive real estate markets usually come with fierce bidding processes, so steering clear of tough markets could save homebuyers a lot of cash on down payments and mortgage loans.
But which markets are the toughest to get into?
Redfin, a real estate information firm, revealed the West Coast continues to be home to some of the most demanding housing markets in the nation.
Redfin agent Derrick Lee said the Sunset District neighborhood in San Francisco was once a last resort for homebuyers in the area. That's no longer the case due to climbing popularity. The median sales price for homes in Sunset District increased 12.5 percent throughout 2014 to $955,000.
Buyers also struggled to keep up with the competition, as homes in the neighborhood lasted only 14 days on the market and sold above asking price 87.9 percent of the time. The average home for sale received five offers, with 28.8 percent of those coming as all-cash offers. That data spurred Redfin to call the Sunset District the most competitive neighborhood in the U.S. in 2014.
"Sunset is getting due respect for its density of good schools and relative affordability," Lee said in a release. "Older residents who have paid off their homes are cashing in while new families and renters are moving in. Cafes and trendy restaurants are popping up to cater to their tastes. Surfing and events like the free Stern Grove concert series and Outside Lands music festival are also drawing attention to the western-most neighborhood in the city as well."
With homes moving so fast, Zillow recommended potential buyers make an offer as early as possible. The real estate firm said the first buyer to come around is often the most motivated buyer.
Other competitive neighborhoods throughout the country
The next two most competitive neighborhoods also hailed from San Francisco: Castro and Bernal Heights.
In Castro, Redfin reported some agents are putting in offers before the deadline to help sway the seller to sell early. If homeowners decide to sell early, they also might not look at offers that come in afterwards, which could be for more money than the offer coming in before deadline.
Rounding out the top 10 most competitive housing markets in the nation were Jamaica Plain, Boston; Silver Lake, Los Angeles; Almaden Valley, San Jose, California; Ardenwood, Freemont, California; Cambrian Park, San Jose, California; Ravenna, Seattle; and Alston, Boston.
How to get into a competitive market
While those looking to stretch their money as far as possible should avoid those competitive markets, some people with jobs in the area are forced to pay more and buy in those demanding areas. If that's the case, Zillow said coming in with a clean offer can greatly help a home sale go through.
It's not always the biggest offer that wins, Zillow said. A clean, professional offer will stand out among sellers because those are the people who are more likely to follow through with a sale. The last thing a home seller wants to deal with is a buyer falling out at the last minute.
A clean, professional offer will look even better when a buyer has a credible lender at his or her side, according to FOX News. FOX stated a lender could greatly help or hinder a buyer's offer because a lender with a strong reputation will be trusted in the market and likely be known by most of the area's real estate agents.
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