Concerns are rising about the potential for a nationwide housing market crash, especially on the West Coast. At least for the moment, a new report suggests that market remains as hot as ever.
The booming technology sector that attracts scores of well-paid workers have driven up home prices — resulting in stiff competition for people trying to put bids on houses in key areas, according to a recent report by Redfin, a Seattle-based real estate brokerage.
In fact, most homeowners are getting multiple offers, and those units move within a week or less of going on sale, Rachel Musiker, a Redfin spokeswoman, told CNBC.
“For buyers, competition is challenging,” Musiker said. “To win, they will likely have to raise their offer price and waive contingencies and it might take several months and several bidding wars before they find success.”
Buyers are often compelled to yield to bidding wars — offering prices considerably higher than the asking rate — in order to outdo each other, Musiker said. This results in a overall surge in home prices.
Cities like Aurora, CO and Sacramento, CA are not tech hubs, but are within commuting distance from the Bay Area. For that reason, even places outside Silicon Valley’s immediate vicinity seeing a surge in competition from workers in search of affordable homes, Musiker said.
Below are Redfin’s top six cities with a population of at least 200,000, ranked according to their competitiveness. A score of 90-100 indicates cities where houses on the market are “most competitive,” and often receive multiple offers per unit.
Median Home Price: $1.17M
Fremont is the fourth largest city in the Bay Area. It has a sizable population of immigrants from Afghanistan, and a commercial area called “Little Kabul” — a cultural hub for Bay Area Afghans. Fremont is also known for having lots of Indian restaurants, and even a Bollywood film theater.
Median Home Price: $1.1M
The largest city in Silicon Valley, San Jose is home to some of the biggest tech giants in the world, including Adobe, Qualcomm, just to name a few. As a result, the city also has a booming population of engineers and computer scientists. Its close proximity to colleges popular for those subjects, like University of California at Berkeley and Stanford, mean those tech companies have lots of talent to draw from.
Median Home Price: $718,000
The birth place of Starbucks Coffee is said to have one shop within a quarter mile of every house. It is also the largest and one of the most densely populated cities in the state of Washington. Both Microsoft and Amazon have their headquarters in Seattle. It is surrounded by nature, and is only a bus ride away from the Canadian-city of Vancouver.
Median Home Price: $820,000
Alameda County’s largest city, Oakland is also a stone’s throw from Silicon Valley hotbeds like San Francisco, Berkeley, Fremont and Richmond. It is one of the most ethnically diverse cities in the U.S., with about 125 spoken languages and dialects.
Median Home Price: $350,000
Aurora is Colorado’s third largest city, often called the “Silicon Valley” of the Centennial State. One of the most bike-friendly cities in the state, Aurora has plenty of opportunities for outdoor activities like hiking and biking. It is close to the Rocky Mountain National Park, which is considered among the most beautiful spots in the U.S.
Median Home Price: $1.4M
The city most closely associated with technology, San Francisco is perched atop multiple hills, and surrounded by the Pacific Ocean. The City by the Bay has the 2nd largest “Chinatown” outside of Asia, and is home to numerous tech giants and landmarks, such as the Golden Gate Bridge and the Transamerica Pyramid.