They’re not exactly duking it out in the streets, but homebuyers are actively battling for homes in New York City suburbs and the Bay Area, pushing up prices in the process.
That’s according to a new report from Redfin.
According to Redfin, almost three in five (57.6%) homes in Newark, New Jersey, sold above their original asking price in May. That is the highest share of the 50 most populous U.S. metros.
Close behind, the Bay Area had 57.3% of homes in San Francisco and 53.2% in San Jose selling above asking.
Nassau County, New York rounds out the four metro areas where more than half of homes that sold in May went for above asking price (51.6%). Redfin said that a third Bay Area metro, Oakland, is number five, with 46% of homes selling over asking price.
All in all, Redfin said, six of the 10 most competitive U.S. housing markets are in the Northeast, and three are in the Bay Area.
Selling Above Asking Price
Milwaukee, where 42.6% of homes are selling above asking price, also in the top 10, Redfin noted.
Redfin said that the AI boom is driving fierce homebuying demand and competition in the Bay Area. Employees of AI companies are collecting big salaries and bonuses, and many of them are putting it toward real estate, the brokerage said. San Jose and San Francisco led the nation in home-sale growth in May, Redfin said, with both metros posting double-digit annual increases, and prices in San Francisco are growing faster than anywhere else in the country.
Newark and Nassau County (Long Island) are suburbs of New York City, and New Brunswick, New Jersey is further flung, but still within commuting distance, Redfin said.
Three other East Coast metros rank among the top 10, too: Providence, Rhode Island (43.8%), Montgomery County, Pennsylvania (43.6%), and Boston (42.1%). Redfin noted that buyers are bidding prices up in those locations because most of them are seller’s markets.
Newark, Nassau County, Providence, Montgomery County, New Brunswick and San Francisco are six of just seven seller’s markets in the U.S., and Boston is a balanced market, Redfin reported.
Proximity to Job Centers
The brokerage added that New York City suburbs are perennially popular because they’re in proximity to one of the biggest job centers in the nation, and homes are typically less expensive than they are in Manhattan.
The Bay Area and the Northeast are bucking the national trend, Redfin said.
Roughly one-quarter (25.8%) of U.S. homes that sold in May went for above their original asking price. That’s the lowest May share since 2020, when the housing market was reeling from the onset of the pandemic, Redfin said.
Conversely, more than half (55%) of homes sold below their asking price in May, while the rest sold at asking price.
Redfin said that most sellers are getting less money than they want because of today’s strong buyer’s market.
It noted that there are hundreds of thousands more home sellers than buyers in the U.S. because high mortgage rates, persistently high home prices, and widespread economic uncertainty are pushing many would-be buyers to the sidelines.
Softer Competition
“Buyers know they have the power, and they’re using it,” said Juan Castro, a Redfin Premier agent in Orlando, Florida. “Buyers are asking for closing cost credits, mortgage-rate buydowns, and lower prices to get the deal done. Sometimes they complete the inspection, find something minor and negotiate aggressively before agreeing to close the deal. I’ve seen buyers ask for a completely new roof because it’s missing three shingles, and I’ve seen buyers ask for a $10,000 repair credit.”
Texas and Florida metros generally have a much lower share of homes selling above asking price than the national average, signaling softer competition, Redfin said.
Fewer than 10% of homes sold above asking in West Palm Beach, Florida (6.6%), Miami (7.4%), San Antonio (8.5%), Austin, Texas (9.1%), Houston (9.1%), Orlando (9.4%) and Tampa, Florida (9.9%).
Those are all among the strongest buyer’s markets in the country, Redfin said, with more than twice as many buyers as sellers in Miami, Austin and Houston.
