With its shrinking home supply and spiking prices, San Jose is the nation’s most competitive market for residential real estate, according to a new report from Redfin.
Analyzing March data, the brokerage said 69.6 percent of homes in San Jose sold for more than the listing price. That was the highest share of “above asking” sales in the country. Judged by the same standard, the No. 2 market in the nation was San Francisco, where 66.7 percent of homes sold for above asking, Redfin said. No. 3 was Oakland, where 65.9 percent sold for more than the list price.
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Supply and demand is the explanation: The tight housing inventory is driving competition among buyers, which keeps pushing home prices up.
“When inventory is this low, it doesn’t take many buyers to buoy the market,” said Chris Trapani, founder and CEO of the Sereno Group.
Now, with the numbers of buyers increasing for the spring season and inventory still at historically low levels, it’s no surprise that “over asking” bids are common in the South Bay, he said.
The most “over asking” activity is happening with homes “under $1.5 million, in your mid-tier neighborhoods — your Willow Glens and your Cambrian Parks and your Campbells,” Trapani said. “That’s where you’re definitely getting multiple competition for those properties.”
It’s a national trend, as well. The number of U.S. homes for sale sank 13 percent in March compared to one year earlier, marking the 18th straight month of annual inventory declines, according to Redfin.
At the same time, said the report, U.S. home prices rose 7.5 percent year-over-year to a median sale price of $273,000.
Nearly a fifth (19.1 percent) of U.S. homes sold in March went under contract within two weeks, and 21.7 percent of homes sold for more than their asking price.
After Denver and Seattle — where newly listed homes spent just eight days on market — Oakland and San Jose were the fastest-moving markets in the nation with 13 and 14 median days on market, respectively.
Throughout the Bay Area, the “short supply, high demand” scenario played out dramatically.
In San Jose, where the number of homes for sale fell a whopping 25.9 percent year-over-year, the median sale price rose 11.3 percent to $957,000. In San Francisco, where inventory fell 14.2 percent, the median price increased 8.2 percent to $1,185,000. And in Oakland, where supply fell 12.7 percent, the median price rose 11.6 percent to $650,000.