What is the Redfin Compete Score? A Guide to the Most and Least Competitive U.S. Housing Markets

For homebuyers, understanding the competitiveness of a local market is the first step to crafting a winning offer. A newly launched tool, the Redfin Compete Score, quantifies this competition for cities and neighborhoods across the United States. Based on recent data, the most competitive markets are concentrated in major tech hubs, while more relaxed markets are often found in luxury or tropical locales. This score, which ranges from 0 to 100, helps buyers gauge what it takes to win a home and assists sellers in developing an effective pricing and marketing strategy.

How is the Redfin Compete Score Calculated?

The Compete Score is designed to rate how difficult it is for a buyer to successfully purchase a home in a specific area. Its calculation relies on a combination of proprietary data from Redfin's own transactions and information from Multiple Listing Services (MLSs). The score is primarily based on four key metrics:

• Number of Competing Offers: How many offers are typically made on a home.
• Waived Contingencies: How frequently buyers waive important contract safeguards, like inspection or financing contingencies, to make their offer more attractive.
• Sale-to-List Price Ratio: The final sale price compared to the last asking price, indicating how much homes sell over or under list.
• Number of Days on Market: The average time a home remains for sale before going under contract.

This data is updated monthly, providing a current snapshot of market conditions. A score of 100 represents the most intense competition possible.

Which U.S. Cities Are the Most Competitive for Homebuyers?

Among large cities with populations over 200,000, the most competitive markets are led by technology centers that have experienced significant population growth. The top 10 most competitive cities are:

1. Fremont, California
2. San Jose, California
3. Seattle, Washington
4. Denver, Colorado
5. San Francisco, California
6. Oakland, California
7. Vancouver, Washington
8. Grand Rapids, Michigan
9. Detroit, Michigan
10. Worcester, Massachusetts

"The most competitive cities are often tech hubs that have attracted an influx of people for jobs, a trend unmatched by the creation of new housing," explains a senior economist at Redfin. "This imbalance leads to intense competition and rising home prices."

What Does a Competitive Market Look Like for Buyers?

In high-scoring markets, the home-buying process moves extremely quickly. Desirable homes can go under contract in less than a week, often sparking bidding wars with multiple offers. In some cases, winning bids may escalate tens of thousands of dollars above the asking price, with buyers frequently waiving contingencies to minimize perceived risk for the seller. This environment requires buyers to be pre-approved, financially prepared to act fast, and willing to make aggressive offers.

Which Cities Offer the Least Competitive Housing Markets?

For buyers seeking less pressure, the least competitive large cities provide more options and longer decision times. The 10 least competitive cities are:

1. New Orleans, Louisiana
2. West Palm Beach, Florida
3. Knoxville, Tennessee
4. Hollywood, Florida
5. Myrtle Beach, South Carolina
6. Dayton, Ohio
7. Gulfport, Mississippi
8. Augusta, Georgia
9. Cleveland, Ohio
10. Greensboro, North Carolina

In these markets, homes may remain for sale for several months, and bidding wars, while possible, are less frequent and typically involve fewer offers. This can be a relief for buyers relocating from more expensive coastal areas.

Key Takeaways for Buyers and Sellers

Based on the data from the Compete Score, market strategies should be adjusted accordingly.

• For Buyers in Competitive Markets: Your offer needs to stand out. Secure a strong pre-approval letter, be prepared to move quickly, and consult with your agent about the strategic use of escalations clauses or the risks and benefits of waiving certain contingencies.
• For Buyers in Less Competitive Markets: You may have more negotiating power. Take time for thorough home inspections and consider making an offer below the asking price.
• For Sellers: Understanding your local Compete Score is crucial for pricing your home correctly and setting expectations for the sale process. In a high-score area, you can anticipate multiple offers quickly. In a lower-score area, pricing competitively from the start is even more critical.

The Redfin Compete Score is a powerful tool for making informed decisions in today's dynamic real estate market. By researching the score for your desired city or neighborhood, you can better understand the local dynamics and tailor your approach for success.