AUSTIN, Texas—A homebuying frenzy is gripping much of the U.S., but Austin takes the prize for the biggest increase in homes selling well above the asking price.

Nearly 2,700 homes in the Texas capital have sold this year for $100,000 or more above their initial listing price, according to an analysis by Redfin Corp. that examined sales through Aug. 11. While a few other U.S. cities have had more properties sell at that premium to the asking price, none have experienced as big a percent rise in homes transacting at that lofty an increase, Redfin said.

“As a consumer, it seems scary to be in a housing market where the home you’re looking at [is] priced at $400,000, then, when you go to put in an offer, you realize the true price is $500,000,” Redfin chief economist Daryl Fairweather said.

The number of homes sold year-over-year for at least $100,000 over asking price has grown nearly 10-fold in Seattle, and fivefold in Oakland, according to Redfin. In Austin, that figure grew by 57 times the number for last year at this time.

The jump in these sales at six figures above the listed price shows how Austin, which has attracted young professionals for years, has become an even more competitive place to buy in recent months.

Startup companies have been flocking here, fueled by the city’s robust job growth, music and cultural scene and amenities such as hiking trails and water sports like kayaking. The city is attracting tech employees and other remote workers from more expensive places like the Bay Area and New York City. Austin is now higher-priced than most U.S. cities, and its cost of living has surpassed that of more cosmopolitan Houston and Dallas. Yet to buyers arriving from Manhattan or San Francisco it often looks relatively affordable, enabling these new residents to bid up home prices.

The number of homes sold year-over-year for at least $100,000 over asking price has grown nearly 10-fold in Seattle, and fivefold in Oakland, according to Redfin. In Austin, that figure grew by 57 times the number for last year at this time.

Bidding wars are breaking out across Austin. Earlier this year, prospective buyers waited in lines that snaked around the corner to view popular homes. Others offered impassioned personal pleas and shared their family stories in hopes of landing a hotly contested home.

In the hottest U.S. housing market in years, many sellers are transacting above their initial ask. In May, a record high of 50% of U.S. homes sold for more than their list price, Redfin said, reflecting how the pandemic and the rise of remote work has led many buyers to seek homes with more space or in cities and towns farther from their offices.

Francisco Ortego and his wife paid nearly $100,000 over asking price for their four-bedroom home in a suburb north of the city in April, after their first seven offers came up empty. That month, nearly 74% of Austin homes sold above their asking price, with the typical home selling for $35,000 above asking price, according to Redfin.

“I don’t think it’s fair, but it’s the reality of the market,” said Mr. Ortego, who relocated his family from Boston last year for a corporate strategy job at Round Rock-based Dell Technologies Inc. “If you want to win, you have to place a super aggressive offer.”

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With Austin’s expanding employer base, analysts say they don’t anticipate the competition cooling. Oracle Corp. recently moved its headquarters to Austin from Silicon Valley. Co-founder Larry Ellison said in 2018 that he expects the corporate campus to grow to as many as 10,000 employees, according to an Austin American-Statesman report. Meanwhile, Tesla Inc. is building a factory in the city with plans to hire at least 5,000 employees.

“People are willing to pay a premium to live in Austin, Texas, because this is where they want to be,” said Emily Chenevert, chief executive of the Austin Board of Realtors. “Many of the things that have driven economic development and the stability of this housing market will remain in place for a long time here.”

Austin Redfin agent John Dawson said he recently closed for $635,000 on a home in a southwest Austin suburb that was listed at $500,000. The sellers received 15 offers.

“The market just devoured it,” Mr. Dawson said.

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