With the holidays upon us, consider yourself lucky if you’re celebrating in a home you were able to purchase in 2017, especially in the Seattle area.
A new report from Redfin shows just how competitive the housing market has been and identifies neighborhoods across the country where competition was the stiffest. Six of the top 10 and 19 of 25 are in Seattle and surrounding suburban neighborhoods.
Seattle-based Redfin reports that just over half of all offers written nationally by the company’s agents encountered competition in 2017. In the Seattle metro area and beyond, 62 percent of offers faced bidding wars and 67 percent of homes listed this year were Redfin Hot Homes — the highest share of any market. That designation is earned by homes with 7/10 or higher odds of going under contract within their first 14 days on the market, as determined by Redfin’s proprietary algorithm.
Grass Lawn, a neighborhood in Redmond, Wash., topped the list as the most competitive neighborhood in the U.S. in 2017. Redfin relied on several factors, including the percentage of homes that sold for more than their asking price, how quickly homes went under contract and annual price growth for the year.
The neighborhood near the Microsoft and Google campuses saw 73 percent of homes sell for over asking price and the typical home found a buyer in just six days. The average sale-to-list price ratio was 108.4 percent, an indication that many homes were bid up well above asking price, Redfin said.
“Grass Lawn is so super-competitive because it’s very close to the Microsoft and Google campuses, and tech companies such as Google and Oracle are expanding their footprints in the area. It is a suburban area with mostly older homes,” Redfin Agent Gina Madeya said in a blog post. “The area offers easy access to one of only two freeways that can get you across Lake Washington and into downtown Seattle and it’s also a short drive from the shops and restaurants in downtown Redmond and Kirkland.”
Redfin provides further insight on a sale in the neighborhood that shows just what it takes to land a home these days:
Madeya helped a family purchase a home in Grass Lawn earlier this year. The home, which Madeya says came on the market slightly underpriced at $860,000, was bid up to over $1 million. Her clients were absolutely in love with the home. Their offer wasn’t the highest, but they won over the sellers by waiving all contingencies, working with a reputable lender and providing a $100,000 earnest money deposit.
“This sounds extreme, but that’s what it takes in some neighborhoods because demand is so high,” says Madeya. “My advice to a Seattle buyer is to get really clear about your full financial capability and your risk tolerance. Find out what you can truly afford and start looking at homes well below that amount, so that when that bidding war inevitably happens, you have some leverage to work with. Get clear early in the search so you and your agent can be more deliberate and strategic.”
Other than some neighborhoods in San Jose, Calif., Boston and Denver sprinkled into the mix, Seattle’s competitive neighborhoods ran away with Redfin’s top 25. Pinehurst was No. 2 and Crossroads in Bellevue was No. 3, among others.