Architecture & Real Estate | April 20, 2021 12:29 pm

The Most Competitive Housing Market in the Country Is Not San Francisco

Real estate remains hot and the number of homes available has dipped considerably

Houses and Palm Trees near San Jose California downtown district; San Jose is considered the most competitive housing market
Houses near San Jose's downtown district. The California city has a highly competitive housing market.
Sean Duan / Getty Images

It’s been hard to buy a home since the pandemic hit; the number of houses on the real estate market dropped 52% from March 2020 to March of 2021, thanks to low interest rates and aggressive demand. Which means home costs in many areas are rising.

And it’s only getting tougher out there, depending on where you’re looking. The financial service LendingTree just released a report on the most competitive housing markets, focusing on the 50 largest metropolitan areas in the United States and using average down payment percentage, share of homebuyers with credit scores above 720 and share of homebuyers who shop around for a mortgage before looking at a house as their criteria.

Their findings:

  • The most competitive markets are San Jose, San Francisco and Raleigh — in that order. San Jose (average sale price of a home: $1.2 million) ranks first in both the “credit score” and “down payment” categories. “It has a lot to do with the amount of supply in the city,” LendingTree Chief Economist Tendayi Kapfidze told Yahoo Finance Live. “In San Jose, it’s a very wealthy area so there’s a lot of competition amongst homebuyers because a lot of people have wealth and can afford homes.”
  • Atlanta, Virginia Beach and Riverside (CA) have the least competitive buyers. LendingTree suggests that buyers in these markets tend to have lower credit scores, smaller down payments and are less likely to shop around for a mortgage.
  • The average down payment percentage in the top 11 most competitive markets is 21%. For the least competitive 12 metros, that number is 19%.
  • In the top 11 most competitive markets, 73% of buyers have credit scores of at least 720. For the 50 largest, it’s 64%. For the 12 least competitive buyer markets, it’s 57%.

But because this report only looks at the country’s largest metropolitan areas, it does not include the outlier towns that are experiencing surprising housing booms, like one New England city we heard about last week.