If you keep up with real estate news and trends, you probably already know that…
According to a recent report, the San Francisco Bay area is the most competitive real estate market in the country. Specifically, this report looked at the number of homes that are selling above the original list price, for the nation’s top 50 metro areas.
At 82%, the Bay Area real estate market had the highest percentage of homes that sold above the list price during April 2022. And most of those sales were priced above $1 million.
Bay Area ‘Most Competitive’ Housing Market in 2022
The real estate technology company OJO, which also operates a property listings website, recently analyzed the competition level within real estate markets nationwide. For this report, housing competition was measured primarily by the percentage of homes sold above the list price.
When a high percentage of houses sell for more than the original asking price, it indicates a highly competitive market. In this type of real estate scene, home buyers have to compete fiercely with one another, which drives up the final sale price. Apparently, the Bay Area housing market has quite a few of these sales.
According to the above-mentioned report, the San Francisco-Oakland-San Jose metro area led the nation for the percentage of homes selling for more than the listing price.
During the month of April 2022, 82% of houses listed in our region sold for more than the seller’s original list price. That was an increase from April of last year, during which 73% of homes ended up selling for more than the listing amount.
According to a recent statement on the company’s website:
San Francisco, California, was the nation’s most competitive metro area, as has been the case every month since OJO Labs began tracking the data.
Denver, Colorado and San Diego, California rounded out the top three most competitive real estate markets. Those metro areas also had a relatively high number of houses that were being sold about the list price.
Inventory Continues to Fall Short of Demand
In these and other hot real estate markets across the U.S., the spring 2022 home-buying season has been highly competitive. This is largely due to ongoing inventory shortages, a factor that is plaguing many major cities across the country.
Here in the San Francisco Bay Area, housing inventory continues to hover near record-low levels. This is arguably the number-one reason why so many homes end up selling for more than the list price. It’s a supply and demand situation — plenty of the latter, but not enough of the former.
How to Compete in a Competitive Market
Despite the highly competitive nature of the Bay Area real estate market, home buyers can still succeed. You just have to prepare yourself, financially and emotionally. Here are some tips for doing just that…
- For starters, research the local housing market where you plan to buy a house. Find out what the inventory situation is like and how long homes are staying on the market. This will give you more insight into the competition factor, down at the local level.
- You could also benefit from broadening your search area. Sure, some people need to live close to where they work. But you might find less competition and more affordable homes if you expand your search radius. Solano County, for example, offers much lower home prices when compared to the regional average.
- Home buyers should also understand the negotiating dynamic that comes with a competitive housing market. Due to the ongoing supply-and-demand imbalance mentioned above, Bay Area sellers tend to have more negotiating ability. This could change over time, but that’s where we are right now.
- Home buyers who plan to use a mortgage loan can also benefit by having their financing lined up ahead of time. By identifying a lender and getting pre-approved for a certain amount, you can increase the strength of your initial offer. And in a competitive real estate market like the Bay Area, the initial offer is very important.
Need a mortgage loan? Bridgepoint Funding is your local Bay Area mortgage company. We offer a wide range of loan options for borrowers. This helps us match each individual client with the best financing option. Please contact us if you have mortgage-related questions or would like to apply a loan.