The company calculates its “compete scores” by combining data on the number of competing offers, contingencies waived by the buyer, the sale to list ratio (the final sale price divided by the last list price), and number of days on market. It uses a scale of 0 to 100, with 100 being the most competitive in an area.
While buyers duke it out in the suburbs, the city centers have been relatively quiet, according to Redfin. “Within the country’s large metro areas … the pattern is pretty consistent,” said Redfin economist Taylor Marr. “The more urban you get, the less competitive it is.”
We looked at the compete scores for Bay Area neighborhoods for the period from Nov. 14-Dec. 14, 2021, and narrowed it down to only those areas where at least 50 homes were sold. That excluded many neighborhoods, but allowed us to examine only neighborhoods for which robust data was available.
North Fremont reigns
North Fremont, which is primarily the 94555 ZIP code, topped the list with the highest compete score of 91, calculated by an average sale-to-list ratio of 108%, a median 9 days on market and 87% of homes sold above listing.
Denise Kashyap, a Fremont realtor with Realty One Group, said North Fremont’s central location is appealing to a lot of home buyers, with its proximity to the Dumbarton Bridge and Interstate 880.
“It’s accessible to go north to the city, south to San Jose and to the Peninsula, or even further out to the East Bay,” she said. “No matter where people are working or what direction they’re going, the North Fremont area is so central.”
According to the U.S. Census, the 94555 ZIP code has a median age of 37.2 years old, is 72% Asian, 14% white, 6% Hispanic and 3% Black. The median household income is just over $161,000, and 2.8% of residents live below the poverty line.
Kashyap said she is seeing either current residents looking to stay in the area and “move up for more square footage,” or buyers from the South Bay and Peninsula who are working remotely and are looking for “award-winning public schools” and “more square footage than their current residences for the same price point.” And, she added, the commute is still reasonable if they have to go to the office once or twice a week.
Many of the new buyers are families with school-age children looking for more space and highly ranked schools. She said at a recent open house, every prospective buyer asked about American High, a top ranked high school in the Bay Area.
Some homes in the area with bigger lots were built in the mid-1980s to early ’90s, while others are bigger homes with smaller lots that were built from 2016 to 2019, and interest in both types of houses is split, Kashyap said.
Other Silicon Valley hot spots
The next highest scores were all in Silicon Valley neighborhoods, with Sunnyvale West coming in second with a compete score of 90, and San Jose’s Blossom Valley coming in third with 89.
Four more San Jose neighborhoods — Berryessa, Cambrian-Pioneer, West Valley and Almaden Valley — ranked next on the list with compete scores of 87 to 88. East End in Alameda, Irvington in Fremont and North Hills in Oakland rounded out the top 10.
“These hot spots are all really close to each other, and not too far east, not too far north or south,” Marr said. Many of the neighborhoods are suburbs closer to Bay Area city centers, making the occasional commute to the office doable, he said.
He said there is a “strong relationship between some very desirable suburbs that usually have good school districts,” which is what we’re seeing in many of the South Bay suburban areas that are highly competitive.
“Home buyers are most likely to face multiple offer situations, and homes typically sit on the market a very short amount of time,” Marr said. That’s in contrast to city centers including San Francisco, where “homes are less likely to see over asking,” and there are many condos that are “not as desirable.”
Available and pending homes on Redfin in the North Fremont show include a 1,830-square-foot home built in 1992 listed March 23 for $1.79 million, with a pending sale at $2.18 million. Another home at nearly 2,000 square feet was built in 2018, and is going for $2.1 million.
Recent dynamic shows signs of slowdown
Marr said back in 2017, the pattern was the “exact opposite”: Most of the competition was in walkable neighborhoods that were close to jobs in major cities including San Francisco, Seattle and Los Angeles. But then the pandemic caused a “major acceleration” in the other direction, he said.
“It dramatically pulled competition in the city center and core cities … and drove demand toward the suburbs,” he said. This class of buyers was selling their homes in urban areas and looking to “buy up” by moving outward and finding bigger homes with more space.
“This in effect created much stronger competition in the desirable suburbs,” Marr said.
Still, this pattern already appears to be slowing down. Marr said broadly speaking, rising mortgage interest rates and a volatile stock market show signs of easing the competition a bit across the board.
“We’re seeing some early signs of people touring fewer homes, according to showing time data in California,” he said, and Google searches for home listings appear to be declining, which “may change the magnitude in competition.”
Kellie Hwang is a San Francisco Chronicle staff writer. Email: kellie.hwang@sfchronicle.com Twitter: @KellieHwang
Article source: https://www.sfchronicle.com/bayarea/article/real-estate-neighborhoods-redfin-17049854.php