Homebuying Demand Just Keeps Getting Stronger

Real Estate & Homebuying News

6/16/2020

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Homebuying Demand Just Keeps Getting Stronger

Published on June 12, 2020 by Glenn Kelman

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Key Takeaways

Demand is 25% above pre-pandemic levels. Buyers haven’t “batted an eyelash” over the possibility of a resurgent pandemic or now protests. Bidding wars are “bananas” with homes “ying off the shelves.” Sale prices are up 3.1%; asking prices are up 9.9%. New listings are still 15% below last year’s levels. More listings may hit the market soon, though sellers still have more health concerns than buyers. A buyer can decide how many homes to visit, but a seller has to “let an open-ended number of people walk through until the home is sold.” Many renters in the city are buying in more affordable outlying areas; home- ownership levels may meaningfully increase for the rst time in 15 years. But continued unemployment could pull rst-time buyers out of the market; “Condos are tough to sell right now… The ball is going to drop and it will be interesting to see how it rolls down the hill.”

Nothing Seems to Deter Homebuyers

See Latest Coronavirus Housing Market News

https://www.redfin.com/blog/home-buying-demand-gets-stronger-amid-pandemic/

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Homebuying Demand Just Keeps Getting Stronger

It seems that nothing can deter homebuyers. Seasonally adjusted demand for the week of June 1 – June 7 is now 25% higher than it was pre-pandemic in January and February, marking the eighth straight week of rising demand.

Our abiding concern in May was about the number of homes for sale, but that’s improving too. After falling to 21% below last year’s level the week of May 25 – 31, new listings last week continued their recovery; last week’s new listings were 15% below last year’s level.

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https://www.redfin.com/blog/home-buying-demand-gets-stronger-amid-pandemic/

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Homebuying Demand Just Keeps Getting Stronger

Listings accepting an offer improved as well. Two weeks ago, this number was down 11% year-over-year, but for the week of June 1 – June 7 it was 9%. With demand surging and supply recovering, we expect sales to strengthen; mortgage purchase applications were up 7% year-over-year in the last week of May and up even more, 13%, in the rst week of June.

Buyers Unfazed by Protests and Pandemics

Agents from Seattle to LA to Philadelphia have been surprised that protests didn’t deter more buyers. “It has been a speed bump,” said Alec Traub, an LA-based teammanager for Redn. Hazel Shakur, Redn Maryland agent, reports that “between the virus and now the protests, folks are not batting an eyelash.” What’s driving demand is low rates and, now, easing credit. According to Sarah Martin, a Redn mortgage advisor in Washington DC, “credit has pretty much loosened up except for self-employed borrowers.”

Sellers Re-Entering Market, Worried About Health Risks

And sellers, always more careful than buyers, are nally responding to increased demand. “A lot of what I’m listing are not new clients, but people I’ve met with over the past few weeks and months,” said Seattle Redn Agent David Palmer. “I’ll be bringing on double-digit listings See Latest Coronavirus Housing Market News

https://www.redfin.com/blog/home-buying-demand-gets-stronger-amid-pandemic/

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6/16/2020

Homebuying Demand Just Keeps Getting Stronger

in the month of June and expect the same for July. Those people who were looking to get top dollar and wanted to wait to list until they could get the most buyer attention, they can denitely get that now.” It’s also easier for buyers than sellers to accept the health risks of touring. “We’ve had a lot of clients who are going to list with us but they’re just not ready yet,” said Mr. Traub, the LA teammanager. “Especially when you live in your house, it’s more difcult to let an open- ended number of people walk through until the home is sold. When you’re a buyer, you can control the number of listings you see in-person. I think a lot of people still don’t feel comfortable with that and what that means for their own health.” Adds Charles Davies, a Redn agent in Philly, “If it’s vacant, I can get those listings all day long.”

Bidding Wars Common

Until supply catches up to demand, prices will rise. For the week of June 1 – 7, year-over-year growth in asking prices was up 9.9%, compared to 7.9% the week before, and 3.9% in January and February. Sales prices for the rst week of June are up 3.1% year-over-year, an improvement from 1.3% in May, when offers from late March and April were still closing. The percentage of newly listed homes accepting an offer within 14 days of their debut increased from 42% in May to 47% in the rst week of June. The major theme of our conversations with agents across the country this past week has been about bidding wars. “It’s just bananas, with so few listings and so many buyers,” said Ms. Shakur, the Redn agent in Maryland. “Having lived through the 2008 bubble, I just want to be cautious. Maybe it’s nowhere near the same size as it was in ’08, and maybe it’ll turn out not to have been a bubble at all. But buyers are desperate. If a property is in a desirable neighborhood, buyers will overpay. Bidding wars, escalations, no inspections, agreement to pay over appraised value, all of that’s becoming the norm.” Adds Mr. Palmer, the Redn agent in Seattle. “Anything I’m pricing correctly right now is ying off the shelf.” No one knows for sure how long this will keep up, but very tight credit in recent months has at least limited housing speculation; price increases have been the result of record-low mortgage rates and inventory. “One thing I’ve noticed on my listings are our seller dashboards,” Mr. Palmer said. The seller dashboard shows Redn listing clients and their agents how much online trafc a listing is getting, and how digital ad campaigns for that listing are performing. “The views are up denitely for what I would normally see for a week’s worth of views compared to this time last year. Usually 1,000 – 1,500 views would be a solid week for your rst week. I’m having listings hit that on the rst day.” See Latest Coronavirus Housing Market News

https://www.redfin.com/blog/home-buying-demand-gets-stronger-amid-pandemic/

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Homebuying Demand Just Keeps Getting Stronger

Buyers Prefer Three-Dimensional Scans to Video-Chat Tours

Online interest in listings now takes many forms. As shelter-in-place rules subside in parts of the country, much of the demand for virtual showings is from relocating homebuyers who want to avoid a long drive or a ight to tour a home. Fifteen percent of tours are happening via video-chat rather than in person. This is half of its April peak, but still 30 times higher than it was pre-pandemic. The popularity of three-dimensional scans has been even more durable, with views of these scans on Redn.com increasing 42% from April to May. In markets like Orange County and Seattle, a quarter of new listings include a scan, and we now believe this will be the most popular way to virtualize a showing, with buyers preferring to move through the home at their own pace, whenever they want.

People Are On the Move

Many of these relocating buyers are pursuing the suburbs, or smaller, more affordable cities. “It’s odd, because I’ve got two different sellers moving to Oklahoma, both for jobs,” said Ms. Shakur, the Redn agent fromMaryland. “That big migration we’re all expecting, it’s beginning to happen. People are now moving more to the interior of the country. I also have a lot of clients who are retiring and moving down south to more tax-favorable states.” “I think some sellers are now at the point where they don’t want to be in the city anymore or keep paying high prices to stay here,” said Mr. Traub, one of Redn’s LA teammanagers. “A lot of people relocate to LA for work, but now they realize they could go back home and their money would go further, especially when they can work remotely.” It has been a point of debate within Redn whether the movements of people we’re now seeing are mostly to the outlying areas of the same city, or to entirely different parts of the country. What we can be sure of now is that this latter group of cross-country movers is already increasing in size, albeit only modestly: in April and May of 2020, 27% of Redn.com users searched outside their metropolitan area, compared to 25% in April and May of 2019. We now speculate that the exibility to work remotely, combined with low interest rates, will lead to higher levels of home ownership in the U.S., which have mostly been declining since 2004. “With interest rates so low, a lot of people want to buy who are currently renting in the city,” said Redn Boston Agent Elynn Chen. “They want to go somewhere for more space.” See Latest Coronavirus Housing Market News

https://www.redfin.com/blog/home-buying-demand-gets-stronger-amid-pandemic/

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Homebuying Demand Just Keeps Getting Stronger

Long-Term, Still Clouds on the Horizon

But even though demand is strong now, no one can say for sure what the long-term outlook is. The whole reason we’re reporting on demand every week instead of every month is because we have seen such a volatile real estate market. “A lot of jobs are not coming back,” said Mr. Palmer, the Redn Seattle agent. “Would-be rst-time buyers are gonna say screw it. They are just thinking about how to pay rent and survive. We have a lot of band-aids with unemployment insurance right now, but those aren’t going to last forever. Condos are tough [to sell] right now. The ball is going to drop and it will be interesting to see how it rolls down the hill.”

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Glenn Kelman Chief Executive Ofcer

Glenn is the CEO of Redn. Prior to joining Redn, he was a co- founder of Plumtree Software, a Sequoia-backed, publicly-traded company that created the enterprise portal software market. Glenn was raised in Seattle and graduated from the University of California, Berkeley.

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6/16/2020

Homebuyer Interest in Single-Family Homes Jumps to Four-Year High - Redfin

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Interest in Single-Family Homes Hits Four- Year High

Published on June 15, 2020 by Lily Katz

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Web searches for single-family homes have popped as the coronavirus pandemic has turned privacy into a hot commodity. Online searches for single-family homes rose to the highest level in four years last month. This comes as the coronavirus pandemic drives buyers to seek out larger houses located farther away from dense urban areas. In May, 36% of saved searches created by Redn.com users ltered exclusively for single- family homes. That’s up from 33% in February—before the coronavirus was known to be widespread in the U.S.—and represents the largest share since March 2016. It also marks an increase from 28% in May 2019.

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https://www.redfin.com/blog/interest-in-single-family-homes-reaches-four-year-high/

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Homebuyer Interest in Single-Family Homes Jumps to Four-Year High - Redfin

Meanwhile, the share of searches for other types of homes, such as condos, townhouses and multifamily listings, has declined. Last month, 7.5% saved searches on Redn.com excluded single-family homes—the lowest level in three years. “One of the biggest benets of living in a condo or an apartment is sharing the cost of rooftops, pools and gyms, but many of these communal amenities have been roped off due to the pandemic,” said Redn lead economist Taylor Marr. “People who were previously willing to share space with strangers in exchange for a nice view and a quick commute now want their own yards and home ofces. Flexible work-from-home policies have made this dream achievable for many house hunters.” During the rst quarter of this year, the median size of new single-family homes climbed to 2,291 square feet from 2,252 in the prior quarter, according to the U.S. Census Bureau—and the National Association of Home Builders said it expects further gains in the future.

Irma Jali, a Redn agent in Houston, recently sold a single-family home to a couple who had moved to Texas due to the pandemic in order to escape their cramped apartment in New See Latest Coronavirus Housing Market News

https://www.redfin.com/blog/interest-in-single-family-homes-reaches-four-year-high/

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Homebuyer Interest in Single-Family Homes Jumps to Four-Year High - Redfin

York City. In Houston, they were able to buy a house with his and hers ofces and space for a gym.

Another one of Jali’s clients is in the process of moving to Texas from San Francisco, and is under contract to buy a house that’s much larger than their current home.

“Coming from San Francisco, they couldn’t get over the spaciousness of what, in my opinion, is a very average size home in Houston,” Jali said. “Everything’s bigger and better in Texas.”

Results by Metro

We also broke down our saved-search data by location to identify the areas that experienced the highest growth in web searches for single-family homes. Of the 28 metros in this analysis, Tampa saw the biggest uptick, with 44% of saved searches ltering for single-family houses in May—up about 10 percentage points from February. Las Vegas, Boston, Seattle and San Jose rounded out the top ve, all around 6 percentage points higher. That compares with growth of 2.8 percentage points on a national level.

Seattle Redn agent Shoshana Godwin said her clients are starting to expand their searches to neighborhoods they wouldn’t have considered in the past, as proximity to the workplace See Latest Coronavirus Housing Market News

https://www.redfin.com/blog/interest-in-single-family-homes-reaches-four-year-high/

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Homebuyer Interest in Single-Family Homes Jumps to Four-Year High - Redfin

becomes less important. Specically, she has seen a spike in interest in West Seattle—a neighborhood that has relatively low housing costs but was previously overlooked by many buyers due to the long commute and the closure of a key bridge to the city center. Now, that’s less of a factor, she said. “Before the pandemic, buyers wanted to be walking distance from the park, but now they want their own private outdoor space so they don’t have to go to the park. I’m even getting more questions about whether homes have enough space for hot tubs,” Godwin said. “We’re seeing this shift from, `Let’s settle for a two-bedroom home and buy something bigger later’ to `Let’s get a three-bedroom house because we both need an ofce.’”

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Lily Katz As a data journalist, Lily is passionate about helping readers understand complex facets of the housing market. She is particularly interested in the issues of climate change, race and gender inequality and housing affordability. Prior to working at Redn, Lily spent four years as a reporter at Bloomberg News in New York City.

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6/16/2020

Coronavirus update: Homebuilder sentiment posts biggest monthly surge ever

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Homebuilder sentiment posts biggest monthly surge ever, a sign housing is rebounding from coronavirus

PUBL I SHED TUE , JUN 16 2020• 10 : 00 AM EDT UPDATED 38 MIN AGO

Diana Olick @IN/DI ANAOL I CK @DI ANAOL I CKCNBC @DI ANAOL I CK

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KEY POINTS

Builder sentiment jumped a striking 21 points in June to 58, the largest monthly increase ever in the National Association of Home Builders/Wells Fargo Housing Market Index.

Any reading above 50 indicates a positive market. In April, it plunged a record 42 points to 30.

Of the index’s three components, current sales conditions jumped 21 points to 63. Sales expectations in the next six months rose 22 points to 68. Buyer traffic more than doubled from May to June, from 22 to 43.

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Coronavirus update: Homebuilder sentiment posts biggest monthly surge ever

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V I D EO 0 1 : 0 0 NAHB housing market index climbs to 58 vs. 46 expected

A faster-than-expected turnaround in homebuyer demand, following a sharp drop-off at the start of the coronavirus pandemic, has the nation’s homebuilders bullish on their business again. Builder sentiment jumped a striking 21 points in June to 58, the largest monthly increase ever in the National Association of Home Builders/Wells Fargo Housing Market Index. Any reading above 50 indicates a positive market. In April, it plunged a record 42 points to 30. “As the nation reopens, housing is well-positioned to lead the economy forward,” said NAHB Chairman Dean Mon, a homebuilder and developer from Shrewsbury, New Jersey. “Inventory is tight, mortgage applications are increasing, interest rates are low and confidence is rising.” Meanwhile, mortgage applications to purchase a newly built home jumped 10.9% annually in May, according to the Mortgage Bankers Association. Of the homebuilder index’s three components, current sales conditions jumped 21 points to 63. Sales expectations in the next six months rose 22 points to 68. Buyer traffic more than doubled fromMay to June, from 22 to 43. This last component was surprising, given howmany builders reported more online inquiries and virtual tours during the pandemic.

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Coronavirus update: Homebuilder sentiment posts biggest monthly surge ever

This report comes on the heels of a better-than-expected quarterly earnings report from one of the nation’s largest public homebuilders, Lennar. Chairman Stuart Miller said the company had stopped its new home starts and stopped purchasing land in March, only to have to reverse course unexpectedly. “So we know that as we get to the fourth quarter we’re going to be a little short on our closings, but nonetheless, we rebooted pretty quickly as the market started showing signs of recovery in housing,” he said. “I think there will be a little bit of a pause in our numbers, but it will come back very quickly.” Miller also indicated that the stories of urban flight are real, as people are rethinking the way they want to live in an age of lockdowns and work-from-home orders. That trend appears to be playing out among all the builders. “Builders report increasing demand for families seeking single-family homes in inner and outer suburbs that feature lower density neighborhoods,” said NAHB Chief Economist Robert Dietz. “At the same time, elevated unemployment and the risk of new, local virus outbreaks remain a risk to the housing market.” Regionally, builder sentiment in the Northeast surged 31 points to 48, and 20 points to 62 in the South. In the Midwest it rose 19 points to 51, and in the West it rose 22 points to 66.

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Competition Increases for Homebuyers as Coronavirus Drives Housing Shortage - Redfin

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Bidding Wars Climb in May as Coronavirus Intensies Housing Shortage

Published on June 15, 2020 by Lily Katz

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Half of Redn offers faced competition, up from 44% in April.

In May, 49.4% of Redn offers faced competition, up from 43.9% during the prior month.

While sellers are jumping back into the market as states across the country reopen, there remains a shortage in houses for sale, which is fueling bidding wars; the number of listings on the market in May was 18.9% lower than the same period last year. “Bidding wars also jumped in May because homebuyers felt they were starting to get more clarity around where the economy was headed, with cities around the nation lifting stay-at- home orders. This gave house hunters more condence to compete,” said Redn lead economist Taylor Marr. “But with coronavirus cases back on the rise in many states, only time will tell whether that condence is sustainable.”

Of the 24 metros in this analysis, 11 saw a majority of Redn offers facing competition in May. That’s up from eight metros in April.

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Competition Increases for Homebuyers as Coronavirus Drives Housing Shortage - Redfin

Redn agents say competition has picked up signicantly in recent weeks with erce bidding wars, many involving all-cash offers that are driving up prices.

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Boston, Dallas and D.C. Were Among the Most Competitive Markets The Boston metro area had the highest rate of competition, with 64.1% of offers written by Redn agents on behalf of their homebuying customers facing bidding wars in May, up from 56% in April. It was followed by Dallas, at 60.8%. Washington, D.C. rounded out the top three, at 57%. The other metros where the bidding-war rate was above 50% were Salt Lake City, Denver, Seattle, Austin, TX, San Francisco/San Jose, Minneapolis, Los Angeles and Portland, OR.

“We’re seeing a frenzy,” Boston Redn agent Delince Louis said. “Any home below $500,000 is receiving multiple offers; we just don’t have the supply to meet the demand.”

To be included in this analysis, metros must have had at least 50 offers written by Redn agents fromMay 1, 2020 to May 31, 2020. An offer is considered part of a bidding war if a Redn agent reported that it received at least one competing bid. See Latest Coronavirus Housing Market News

https://www.redfin.com/blog/competition-increases-homebuyers-coronavirus-drives-housing-shortage/

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Competition Increases for Homebuyers as Coronavirus Drives Housing Shortage - Redfin

In Miami, just 28.6% of offers faced competition, the lowest rate of any market in this report. The metro with the second lowest bidding-war rate was also in Florida: Tampa, at 31.5%. Search …

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Detroit experienced the largest increase last month, with the share of offers facing competition climbing 26.5 percentage points to 50%. Michigan was one of the few states in the U.S. that did not deem real estate an essential service during the coronavirus outbreak, but it began to ease restrictions on the industry in early May, which likely explains the jump in Detroit’s bidding-war rate.

Meanwhile, Las Vegas saw its bidding-war rate drop by 21.2 percentage points, making it the biggest decliner.

Single-Family Homes Were the Most Likely to See Bidding Wars

In May, 51.5% of offers for single-family homes faced competition, up from 45.6% in April. That compares with 48.7% of offers for townhouses and 38.8% for condos.

“People no longer want to share laundry or a yard,” Louis said. “I listed a single-family home in Boston proper at the height of the coronavirus lockdown and it got 14 offers. ‘Home’ means more right now than ever, and we’re seeing this new sense of urgency among buyers to nd places with more privacy.”

In some of the most competitive metros, including Boston and Seattle, agents said relatively affordable homes were the most likely to receive multiple offers.

“It feels like virtually every home between $300,000 and $500,000 gets into a bidding war now, whereas before the pandemic, it might’ve been closer to 50-50,” said Brian Richards, an agent in Tacoma, WA, which is in the Seattle metro area. “And like never before, buyers are willing to pay above the appraised value.”

Here’s a metro-level look at bidding war rates in May compared with April:

Metro area

Share of Redn offers that faced competition in May

Share of Redn offers that faced competition in April*

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Competition Increases for Homebuyers as Coronavirus Drives Housing Shortage - Redfin

Metro area

Share of Redn offers that faced competition in May

Share of Redn offers that faced competition in April* Sear h …

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Boston, MA

64.1%

56.0%

Dallas, TX

60.8%

43.2%

Washington, D.C.

57.0%

47.5%

Salt Lake City, UT

55.7%

57.5%

Denver, CO

55.4%

40.4%

Seattle, WA

55.2%

51.2%

Austin, TX

54.8%

44.7%

San Francisco / San Jose, CA 53.4%

52.4%

Minneapolis, MN

52.2%

41.2%

Los Angeles, CA

51.2%

47.1%

Portland, OR

51.0%

50.6%

Detroit, MI

50.0%

23.5%

San Diego, CA

49.1%

53.4%

New York, NY

45.7%

41.0%

Sacramento, CA

45.5%

53.4%

Atlanta, GA

44.2%

37.0%

Philadelphia, PA

42.7%

40.9%

Phoenix, AZ

41.9%

37.6%

Houston, TX

40.3%

37.5%

Raleigh, NC

37.7%

29.0%

See Latest Coronavirus Housing Market News

https://www.redfin.com/blog/competition-increases-homebuyers-coronavirus-drives-housing-shortage/

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Competition Increases for Homebuyers as Coronavirus Drives Housing Shortage - Redfin

Metro area

Share of Redn offers that faced competition in May

Share of Redn offers that faced competition in April* Sear h …

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Chicago, IL

34.6%

30.4%

Las Vegas, NV

33.8%

55.0%

Tampa, FL

31.5%

17.9%

Miami, FL

28.6%

26.1%

National

49.4%

43.9%

*NOTE: Due to data availability, April represents the share of Redn offers that faced competition between April 9, 2020 and April 30, 2020.

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Houses for sale will be ‘gobbled up’: Barbara Corcoran

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Homebuyers will ‘gobble up’ houses for sale this summer, according to Barbara Corcoran, host of ABC’s Shark Tank and founder of the Corcoran Group, an New York City-based residential brokerage firm. Before the coronavirus pandemic, the U.S. did not have enough homes for sale to meet demand. But with sellers slow to re-enter the market because of the nationwide lockdowns and demand higher than ever, the U.S. has become an even more competitive market, said Corcoran. “When the buyers in many of the states that are restricted are allowed to come out and actually look at houses, they’re going to make a lot of purchases very quickly. So even in states where you have excess inventory, it’s going to be gobbled up,” Corcoran told Yahoo Finance. For the week ending June 13, inventory was down 27% compared to last year, according to Realtor.com. Inventory hit a 25-year low in December 2019, with moderate improvement at the beginning of 2020. But it plunged when the pandemic hit the U.S. in mid-March and sellers pulled their homes off the market, according to an analysis by Odeta Kushi, deputy chief economist for First American Financial Corporation, a a Santa Ana, California-based provider of title insurance, settlement services and risk solutions for real estate transactions. The coronavirus forced Americans to work from home and redefined how Americans see their home. Some Americans are now looking for new homes with bigger yards, hom e offices and more square footage, after spending months in lockdown. Studies also show that more buyers are now looking to the suburbs for their next home, according to Redfin. “Everybody’s reassessed the concept of home, and what that creates is the desire for change. And when you have change, you have a rising housing market,” said Corcoran. Plus, mortgage rates hit an all-time low this week, incentivizing even more buyers into the market. Mortgage applications hit an 11-year high for the week ending June 12, according to the Mortgage Bankers Association. “[There are] giveaway prices in the mortgage market where money is so cheap it’s almost like you’re embarrassed to say you don’t have a mortgage anymore. There’s so much incentive there,” said Corcoran, who noted that tightened lending restrictions are the one negative. ‘Explosion of prices’ When more people want a product than the market can supply, the price goes up. Home prices already rose to an all-time high before the pandemic, as homes in the U.S. sold for an average $384,900 in the first quarter of 2020 — well above highs before the Great Recession, which reached an average of $322,100 in its peak, according to the Federal Reserve of St. Louis.

6/23/2020 https://finance.yahoo.com/news/houses-for-sale-will-be-gobbled-up-barbara-corcoran-163...

Houses for sale will be ‘gobbled up’: Barbara Corcoran

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With heightened demand, homes in the U.S. could get even more expensive this summer, according to economists. “I think you’re going to see an explosion of prices, really,” said Corcoran. “Prices are going to continue to go up, when the buyers in many of the states that are restricted are allowed to come out and actually look at houses, they’re going to make a lot of purchases very quickly.”

Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter

Read the latest financial and business news from Yahoo Finance

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More from Sarah: We are headed to a V-shaped housing recovery: expert

House flipping hits a record before the coronavirus pandemic swept the US: study

‘Summer is going to be a good period for the housing market’: economist

6/23/2020 https://finance.yahoo.com/news/houses-for-sale-will-be-gobbled-up-barbara-corcoran-163...

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