Author: Kerrie Kennedy

More than half of homes selling within two weeks

Kerrie Kennedy Leave a comment

A new report from Redfin shows how inventory shortages are driving a chain reaction that includes accelerating home prices, unprecedented competition and surprisingly, the suppression of much-needed new listings.

The Seattle-based real estate brokerage looked at key metrics across more than 400 U.S. metropolitan areas during the 4-week period ending February 7.

According to the report, the median home sale price in the U.S. increased 15% year over year to $318,750, while asking prices of newly listed homes hit a new all-time high of $334,770, up 10% from the same time a year ago.

In a typical year, asking prices do not surpass the previous year’s peak until March.

But determined buyers are not letting rising prices stop them. Pending home sales during that 4-week period were up 29% year over year.

For the week ending February 7, the seasonally adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other services from Redfin agents—was up 63% from the same period a year ago.

Buyers are also buying more quickly to get ahead of the competition. The report showed that 52% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 43% rate during the same period a year ago.

This is the first time the four-week average has surpassed 50% since at least 2012 (as far back as Redfin’s data for this measure goes). During the week ending February 7, the rate was 57%.

Homes across the country are also selling for close to listing prices. The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased slightly to 99.3%—1.6 percentage points higher than a year earlier.

Meanwhile, new listings of homes for sale were down 11% from a year earlier.

Active listings (the number of homes listed for sale at any point during the period) fell 37% from 2020 to a new all-time low.

“There is a serious lack of new listings, and although prices are through the roof, homeowners are reluctant to sell, because it’s so hard to buy again unless you are moving to a less expensive area where you can afford to outbid other buyers,” said Redfin chief economist Daryl Fairweather in the report. “Sellers who are concerned about finding their next home are asking buyers for a rent-back agreement, which allows the seller to stay in the home until they can move into their next one. Offering a rent-back agreement can also be a winning strategy for buyers with flexible timelines.”

For more on changing buyer preferences, see how the preferences for large kitchens and remote work-friendly homes are driving new purchases.

Here’s what 2021 buyers want in a kitchen

Kerrie Kennedy Leave a comment

Most Realtors know that kitchens not only sell houses, buyers pay more for homes with upgraded kitchens. But what upgrades and trends will capture their eyes? The 2021 U.S. Houzz Kitchen Trends Study surveyed more than 2,000 homeowners who are in the midst of, planning or recently completed a kitchen renovation. Not surprisingly, they found some new trends emerging from the pandemic:

Surplus storage. Stocking up on paper towels, canned goods and bottled water has left many homeowners in search of more storage, either by upgrading pantry cabinets (46% of respondents) or adding a walk-in pantry (13% of respondents). “Storage has really come into focus as people have spent more time at home during the pandemic,” said Liza Hausman, Houzz vice president of Industry Marketing, in the report. “We’re seeing an increase in the amount of cabinetry added in renovations, and more homeowners are reaching out to professionals on Houzz for help making their kitchens work better, most often within the same layout and square footage.”

Built-in organization. Blame tidying guru Marie Kondo and the home organization duo behind The Home Edit, but home organization has become both a necessity and in an uncertain world, a comfort of sorts. High on the list are built-in specialty organizers, drawers and trays. The most popular organizers are for cookie sheets and spices (48% and 39%, respectively), while the most common specialty drawers are pullout waste or recycling drawers (60%). More than a third of kitchen renovations include specialty shelving trays, such as Lazy Susans, and pullout or swing-out trays (38% and 34% respectively), making deep or hard-to-reach spaces more accessible.

Not-so-open. The number of renovating homeowners creating an open-concept floor plan by opening up their kitchen to other interior spaces has dropped dramatically since 2019 (43% in 2021 versus 53% in 2019). However, homeowners said they still want kitchens that open up to the great outdoors, consistent with an increased demand for outdoor living.

Island appliances. Nearly two-thirds of renovated kitchens feature an island (63%) and more than half of those newly added or upgraded islands feature a new appliance (55%), up three percentage points from the previous year. Among these islands, more than a third include a dishwasher and/or microwave (34% and 33%, respectively).

Pops of color. Maybe it’s lockdown boredom, but homeowners are going for more colorful looks, including multicolored backsplashes (18%) blue walls (7%) and grey flooring (14%). But the majority are adding pops of color on their island cabinetry. “Forty-one percent of renovators differentiate their island cabinet color from the colors in the rest of the kitchen,” the study said. “Blue and gray are the top choices for nearly half of homeowners with contrasting island cabinets, while only 13% choose these colors for their man wall cabinetry.”