Here Are The Cities Where It’s Toughest to Buy A House

Due to several mortgage interest rate hikes and low housing inventory across the board, 2018 made for a particularly difficult year for homebuyers. And while 2019 is predicted to remain a sellers market for much of the US, a recent drop in interest rates for 30-year and 15-year fixed mortgages, has lead to a 9% increase in purchase applications. We haven’t seen that big of a jump since 2010.

This means despite the competition, many people are still planning on buying a home this year, in order to take advantage of the interest rate savings, which can be anywhere from $50 to $200 a month. If you happen to be one of those people or maybe you’re just curious about market trends, here is a list of the most competitive cities to buy a home according to Redfin.

These results reflect the percent of offers written by Redfin agents between September and November of 2018.

  1. Oakland, CA
    Specifically the neighborhoods of Oakmore, Glenview, and Lincoln heights saw 90% of offers face competition. This number is actually down from 2017 where it reached 100%.
  2. Washington, DC
    DC saw competition in 85% of homes in neighborhoods of Adams Morgan and Cardozo. The Placentia neighborhood of Orange County, CA also saw similar competitive offers.
  3. San Francisco, CA
    The Mission District of San Francisco saw 80% competition. And make sure to start saving now as the average 20% down payment is around $180,000 for this area, which could easily cover the cost of an entire home in Louisville, St. Louis, Memphis, Indianapolis, Cleveland, Oklahoma City, and Buffalo, NY.
  4. Boston, MA
    Arlington Heights and Malden neighborhoods were particularly competitive at 79%. Boston, as a whole, finds several neighborhoods among this list due to lack of homes on the market and the demand for housing near its prestigious universities.
  5. San Jose, CA
    The Milpitas neighborhood faced competition among 73% of offers. It’s also interesting to note, that San Jose ranks as the city requiring the highest down payment for its homes, where the median price is $1,180,000.

An interesting omission from this list is Seattle, whose competition rate was only around 25% during the time of this study. Seattle frequently ranks as one of the most competitive housing markets, but November saw a median home price of $644,000 in November versus $726,000 in early 2018 for King County. Sales were also down 19% in 2017 when compared to 2018.

If you’re considering buying a home in any of these markets, be prepared for competition and accept the possibility of paying more than asking. Also, keep an eye on interest rates as they can have a big impact on how many homebuyers enter marketplace.

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