In Lightning-Fast Real Estate Market, Buyers Forced To Risk Fallout From Snap Decisions
With the average home sold between July 2020 and June 2021 sitting on the market for a median period of just one week before going under contract, American home buyers are being forced to make snap decisions in order to compete with the likes of Blackrock and (at least during this time period), robo-Zillow, if they hoped to land the home of their dreams – or simply profit from the red-hot real estate market.
According to new data released Thursday by the National Association of Realtors, the one-week figure is the shortest ever going back to 1989, down from three weeks a year earlier, the Wall Street Journal reports.
The combination of rapid turnover during a surge in pandemic-related home buying as people sought more space to hunker down, low mortgage-interest rates, and a constrained supply thanks to caution over showing homes during Covid-19, helps to explain how home prices also rose to multiyear highs. For sellers who did throw their homes on the market, online tools allowing for remote house tours and scheduling showings helped speed up the process, according to real-estate agents. A large proportion of cash buyers – including corporate investors, has also sped up the process.
And despite the housing market having cooled slightly in recent months, buyers who want to participate still have a much shorter window of time to mull what, for most Americans, is possibly the largest purchase of their lives. What’s more, many buyers are waiving their rights to terminate a contract over low appraisals or unfavorable inspections, in order to present themselves as a more favorable buyer in a bidding war.
“There’s no plotting of where the Christmas tree will be and measuring for a couch in that scenario,” said NAR VP of demographics and behavioral insights, Jessica Lautz. “You really are making that decision very fast.”
Leah and Ian Evison moved from St. Paul, Minn., to Seattle in January to be closer to their daughter and her family. When they started house hunting in Seattle, they learned that houses typically went off the market within days of being listed, and showings were often limited to 30 minutes each.
“It felt awful,” Ms. Evison said. “We wanted to move here so much that we were willing to do it, but it felt really ridiculous.”
After two unsuccessful offers, the Evisons bought a three-bedroom house in March following a bidding war. -WSJ
In the year ended in June, the median sales price of $305,000 (up from $272,500 the year prior) was the full asking price – the highest since NAR began tracking the data in 2002, per the report.
Meanwhile in September, the hottest markets in terms of how fast homes sold were Indianapolis; Denver; Grand Rapids, Mich.; Seattle and Tacoma, Wash, according to Redfin.
According to a September survey from the National Association of Home Builders, around 2/3 of prospective home buyers have been house-hunting for at least three months. Around 45% of those say they haven’t been successful because they were outbid by other buyers.
That said, things are starting to cool down – with active listings in the four weeks ended Oct. 31 having fallen 22% from a year earlier, per Redfin data.
“Instead of a house lasting three days on the market, it’s lasting seven days,” said Orlando, FL real-estate agent Harold Torres, who says that for buyers, “negotiation and any type of wiggle room is not really there yet.“
Sun, 11/14/2021 – 17:30