This humble 2,385-square-foot New Jersey home sold for a stunning $620,000 above asking price — in just 1 week. Here’s why Garden State house prices are on fire (plus 3 other US hot spots)

It may seem odd that a simple home described as a “fixer-upper” would sell for $1.72 million, but as Saritte Harel of Keller Williams told the New York Post, “This sale exemplifies the current state of the New Jersey housing market.”

Harel lives in the area herself and her real estate team led the sale. In a released statement, she explained that “[w]ith limited inventory and strong buyer demand, competition is intense, and properties in prime locations like Short Hills are highly sought after.”

Short Hills is a popular area to live in, with a hot housing market thanks to its proximity to New York City, its upscale suburban feel and the limited amount of local inventory. Around 20% of homes in Short Hills sold for above the asking price in recent years, and homes typically sold in as little as 10 days according to Redfin.

Of course, Short Hills is not the only competitive market in the U.S. Here are three other booming locales where buyers may find themselves in bidding wars — and sellers may find themselves sitting on a pile of cash.

San Jose, California

San Jose is consistently one of the hottest real estate markets in the U.S. It earned an 86 out of 100 on Redfin's competitiveness scale. The typical home there sold for 103.8% of list price over the past year, with 56.9% of properties selling for above the asking price.

Homes sell quickly in San Jose, staying on the market for an average of just 27 days, even as prices are up 11.4% year-over-year and homes now cost an average of just over $1.4 million. A tight local inventory and proximity to Silicon Valley are the big drivers of high prices here, along with a desirable climate and a somewhat restricted supply due to being surrounded by mountains.

Rockford, Illinois

Rockford earned a Redfin competitiveness score of 84, garnering the honor of being the second-most competitive market in the U.S. Homes in Rockford sell for 97.1% of their list price, on average, and the median sale price of $155,000 marks a 10.7% increase year-over-year. Homes also sell in just 21 days in Rockford.

Rockford's affordability has been a big draw thanks to high mortgage rates. Plus, low supply coupled with high demand in the area have pushed up prices and led to 28.8% of all homes selling for over their asking price.

Omaha, Nebraska

Omaha is number three on Redfin's list of the 10 most-competitive U.S. cities for housing, earning a score of 81. Homes here typically sell for 98.2% of their list price, and the median sales price of $261,500 is 3% higher than last year.

Young professionals are flocking to the area, and as the population grows, demand for affordable housing has increased. There's limited inventory to house new residents, many of whom are driven to Omaha by the fact it is Nebraska's most populous city with ample employment opportunities and a diverse culture.

Ultimately, all of these areas have a lot going for them — but buyers in these, and other competitive markets may want to be careful to avoid a bidding war like the one on that New Jersey home. Otherwise, they could end up paying a lot more than the asking price for the property of their dreams.