States with the Most Competitive Real Estate Markets in 2021

Following the housing market boom of 2020, these ten states’ real estate markets have maintained a stiff level of competition in 2021. 

Real estate is a hot topic in 2021. From aspirationally scrolling through Zillow to hunkering down to actually start house hunting, buying a home has been a top-of-mind priority for many Americans. Recent real estate prices reflect that interest, too: U.S. cities experienced an average year-over-year increase of 5.43 percent in home sale prices from 2019-2020 to 2020-2021, according to an Insurify analysis of cities with the highest home sale prices in 2021. Demand is high, and list prices have followed, making the real estate market deeply competitive for prospective buyers.

Housing markets across the U.S. saw sky-high home prices in 2020 following the onset of the pandemic, a trend that has evidently continued on into 2021. While some real estate markets have shown signs of slightly cooling off after that initial spike in sales, many have maintained their popularity throughout the year. Curious to see which states have continued their hot streak in real estate this year, the researchers at Insurify analyzed monthly real estate metrics from Redfin to identify the states with the most competitive real estate markets in 2021.

A heat map showing how competitive the housing market in each state has been in 2021.

Insights

  • National averages. The average Competitive Market Score across the nation in 2021 is 64.8 out of 100. The average monthly share of homes sold above their list price between January and August 2021 was 46 percent. The average share of homes sold within two weeks of their listing date was 51 percent, and the average supply of real estate, indicated by the number of months it would take supply to be bought up if no new homes came on the market, was 1.57 months during that same period (calculated by total inventory divided by the number of home sales per month). 
  • Geographic diversity among the top ten. The states with the most competitive real estate markets are not confined to one U.S. region, but rather are spread across the nation. From the Pacific Northwest to the Mountain States to snowy New England, house hunters have had a busy year.
  • A return of pre-pandemic homebuyer hotspots. While states with the most competitive real estate markets in 2020 were primarily located in the Midwest and Northwest, 2021’s rankings indicate that homebuyers’ priorities are starting to look more similar to those of the pre-pandemic world, with the highest housing prices concentrated in coastal states with some of the most populous metropolitan areas. In 2020, following the initial COVID-19 nationwide lockdown, suburban housing markets across the country skyrocketed as many urban dwellers looked to move out of shut-down cities to more suburban regions, where securing more space for a lower price tag was more viable. With states like California and New York entering 2021’s rankings, housing markets in these coastal states—also home to more expensive, populous cities—are evidently back in demand.

Methodology

The data scientists at Insurify, a site to compare home insurance quotes, referred to real estate metrics from Redfin Housing Market Data to determine the ten states with the most competitive real estate markets in 2021. States were ranked using a proprietary scoring algorithm on the following factors: months of supply (inventory divided by home sales, which indicates how long it would take supply to be bought up if no new homes came on the market), share of homes sold above list price (percent of homes sales with a sale price greater than their latest list price covering all homes with a sale date during a given time period), and share of homes that went under contract within two weeks of their listing date (as a percentage of pending sales)

Redfin compiles monthly real estate statistics across multiple geographic levels in the United States. To calculate how competitive a state’s real estate market has been this past year, the data scientists at Insurify took the average of each of the three metrics from January-August 2021. These scaled values were then used to create a standardized composite score out of 100 for each state — 100 being the most competitive, while 1 being the least. North Dakota, South Dakota, Montana, and Wyoming did not receive scores due to the unavailability of those states’ data.

States with the Most Competitive Real Estate Markets, 2021

10. New York

  • Competitive Market Score: 83.0 out of 100
  • Percent of homes sold above list price: 37%
  • Average share of homes per month sold within 2 weeks of listing date: 39%
  • Average months of supply in 2021: 2.89

The New York real estate market has been more than merely active in 2021 — the Empire State’s housing market is 22 percent more competitive than the national average. With the reopening of New York City following COVID-19 vaccine rollouts in 2021, real estate in the Big Apple experienced what Business Insider referred to as a “Hot Vax Summer”, paving the way for increased demand and competition.

9. New Jersey

  • Competitive Market Score: 83.6 out of 100
  • Percent of homes sold above list price: 50%
  • Average share of homes per month sold within 2 weeks of listing date: 37%
  • Average months of supply in 2021: 2.33

Homes in the Garden State have been flying off the market in 2021. New Jersey has boasted the ninth-most competitive real estate market in the nation over this past year. The real estate market in New Jersey is 23 percent more competitive than average this year; with over half of homes on the market being sold above their listing price, it’s clear that prospective buyers better act quick and be willing to potentially break their budget in order to secure a house in New Jersey.

8. California

  • Competitive Market Score: 84.3 out of 100
  • Percent of homes sold above list price: 60%
  • Average share of homes per month sold within 2 weeks of listing date: 51%
  • Average months of supply in 2021: 1.35

Realtors in the Golden State have been having a golden year. California’s housing market makes the rankings as the eighth-most competitive in the country in 2021. With a Competitive Market Score that is 24 percent higher than the national average, potential homebuyers in California have had to brace themselves for fierce competition during their searches.

7. Vermont

  • Competitive Market Score: 86.2 out of 100
  • Percent of homes sold above list price: 36%
  • Average share of homes per month sold within 2 weeks of listing date: 43%
  • Average months of supply in 2021: 2.91

The Green Mountain state is not only flush with natural beauty but also stiff with competition to secure a home: Vermont has been home to the seventh-most competitive real estate market in the U.S. over this past year. On average, the housing market in Vermont has been 25 percent more competitive than the national average since January 2021, making property in this New England gem one of the hottest commodities in the country.

6. Nebraska

  • Competitive Market Score: 86.4 out of 100
  • Percent of homes sold above list price: 53%
  • Average share of homes per month sold within 2 weeks of listing date: 75%
  • Average months of supply in 2021: 0.85 

In 2021, securing a new property in Nebraska is not an easy get. Housing markets in the Cornhusker State are 25 percent more competitive than average, with over half of the properties on the market selling above list price and less than one month’s supply of housing inventory available on the market. Nebraska is one of the more affordable states in the U.S. to buy a home due to lower-than-average property values, putting this Midwestern state on the radar for budget-conscious homebuyers this year.

5. Utah

  • Competitive Market Score: 86.6 out of 100
  • Percent of homes sold above list price: 60%
  • Average share of homes per month sold within 2 weeks of listing date: 65%
  • Average months of supply in 2021: 0.91

In the Beehive State, prospective homebuyers have been kept busy in 2021. With a Competitive Market Score that’s 26 percent higher than the national average, Utah’s housing market has been the fifth-most competitive in the nation over the past year. Consistent with last year’s trends, real estate in Utah is not only hot but even described by the Salt Lake Tribune as “overheating”, indicating that the high demand for property has yet to slow down following the housing market boom of 2020.

4. Oregon

  • Competitive Market Score: 87.1 out of 100
  • Percent of homes sold above list price: 56%
  • Average share of homes per month sold within 2 weeks of listing date: 67%
  • Average months of supply in 2021: 1.05

Oregon’s real estate market has been highly competitive over the past year, with higher-than-average rates of homes selling above their list price and within 2 weeks of their listing date. In fact, with a Competitive Market Score that eclipses the national average by 26 percent, the Beaver State is fourth in the rankings for its piping hot real estate market. Not the only PNW state in the rankings, Oregon’s competitive housing market throughout 2021 indicates a high demand for property in states with beautiful landscapes and plenty of natural diversity.

3. New Hampshire

  • Competitive Market Score: 94.2 out of 100
  • Percent of homes sold above list price: 60%
  • Average share of homes per month sold within 2 weeks of listing date: 50%
  • Average months of supply in 2021: 1.71

Third in the nationwide rankings for having one of the most competitive real estate markets over this past year, prospective buyers in the Granite State have faced a market that’s 32 percent more competitive than average in 2021. New Hampshire’s state motto may be to live free or die, but the cost of a new home there is anything but; with over 60 percent of new properties being sold above list price, real estate in New Hampshire is in demand with the price tag to prove it.

2. Colorado

  • Competitive Market Score: 97.0 out of 100
  • Percent of homes sold above list price: 61%
  • Average share of homes per month sold within 2 weeks of listing date: 67%
  • Average months of supply in 2021: 1.06

Colorado is home to beautiful hiking ranges, impeccable ski slopes, and some of the most cutthroat homebuyers in the nation. The Centennial State’s real estate market in 2021 has been the second-most competitive in the U.S., with a Competitive Market Score that’s 34 percent greater than the national average. Properties in Colorado have been flying off the market this past year, with 24 percent more houses being sold within two weeks of their listing date compared to the nationwide mean.

1. Washington

  • Competitive Market Score: 97.8 out of 100
  • Percent of homes sold above list price: 60%
  • Average share of homes per month sold within 2 weeks of listing date: 80%
  • Average months of supply in 2021: 0.67

Coming in at number one in the nation for the second year in a row, Washington’s real estate market has consistently been hot and fast-moving throughout 2020 and 2021. In a housing market 34 percent more competitive than the national average, buying a home in the Evergreen State has cost homebuyers more green than initially anticipated; with over 60 percent of homes sold above their list price and dwindling inventory to match, new homes on the Washington housing market have remained a tough get.

If you have any questions or comments about this article or would like to request the data, please contact insights@insurify.com.

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