Two California cities top list of most competitive markets
With fewer available homes on the market, bidding wars are heating up.
Two California cities top LendingTree’s list of 50 most competitive U.S. cities to buy a home — San Jose, followed by its neighbor to the north, San Francisco. The online lending marketplace ranked the 50 most competitive metro areas in the U.S. based on a buyer’s credit score, down payment amount and how much a buyer shopped around for a mortgage.
“It has a lot to do with the amount of supply in the city,” LendingTree’s Chief Economist Tendayi Kapfidze told Yahoo Finance Live. “We know that 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.”
In San Jose, where the average sale price of a home is $1.2 million, buyers had some of the best credit scores in the country. According to LendingTree, 84.15% of buyers in the “Capital of Silicon Valley” had a credit score of 720 or higher. A credit score of 720-850 is considered excellent and usually guarantees buyers get the best rates on credit cards, car loans and home mortgages.
The average down payment in San Jose was 23.67% of sale price, a national high. “In a lot of cities across the country, that number is less than 20%” said Kapfidze. In San Francisco, where the average sale price is $1.4 million, 81.96% of buyers had a credit score of 720 or higher and the average down payment was 21.43%.
Up-and-coming Raleigh, North Carolina, was the third most competitive metro area for homebuyers. With the average home sale price of $340,000, LendingTree found that 70.48% of buyers in Raleigh had a credit score of 720 or higher and the average down payment was 21.15%.