Category: Market Data

Remote workers could continue to drive the post-pandemic market

Tim Inklebarger Leave a comment

The pandemic-driven trend of working from home is driving home buyers to suburban areas in search of larger residences, and it could just be the beginning, according to a new report from the real estate media company Homes.com.

Homes.com President David Mele discussed the report at the National Association of Real Estate Editors 54th Annual Real Estate Journalism Conference, noting that while the flight to the suburbs trend is real, it also is likely to continue well after a vaccine becomes widely available.

“This is really just getting started,” Mele said in the panel Suburban Migration and Coronavirus Changes. The trend could increase post-pandemic, he said, because many workers are still waiting to see if they will work from home permanently.

Homes.com’s study of more than 1,000 consumers and 600 real estate professionals shows that buyers are not only moving away from urban areas, but they’re also making more long-distance moves.

Mele said that the survey revealed that 70% of respondents said their pandemic relocation is permanent. One out of three respondents who relocated in the last 12 months did not plan to move prior to the pandemic. And one in four said the move “was sparked by a change in their job situation, presumably caused by the pandemic,” the report noted.

Forty-five percent of those who haven’t moved said they would if given the opportunity to work from home, and 20% said working remotely made their move possible.

Industry professionals were optimistic about 2021 as well, with a majority of industry experts (57%) anticipating continued robust homebuying activity. Another 28% of respondents said they expect more transactions next year.

“The surge in the work-from-home population has rewritten the playbook for many homebuying and rental decisions, from when and where to relocate, to what people are looking for in their next residence,” Mele said in a press release. “That, in turn, is prompting changes for real estate professionals, many of whom are expanding their market area to better serve clients who are moving farther than before. If working from home becomes standard operating procedure for many companies, as predicted, these changes will be with us for years to come.”

Other highlights from the survey include:

  • 40% who moved or plan to are moving more than 100 miles away, and are moving over 500 miles.
  • Approximately 30% are leaving cities for the suburbs.
  • 15% are looking for less populated areas.
  • 78% of real estate professionals said requests for home offices are the No. 1 change. Larger square foot was next at 57%, followed by outdoor recreational spaces at 45%, and upgraded kitchens at 44%.
  • The buyer’s market has made made sellers less likely to accept a contingency (69%), show a house without a pre-approval letter (59%), negotiate on repairs (57%) or negotiate with buyers for a quick sale (40%).

Are condos the new bargain property?

Kerrie Kennedy Leave a comment

Single-family home sales have been driving the U.S. housing market of late, as homebuyers continue to leave populated cities behind and instead opt for space and privacy in the suburbs and rural areas.

But where does that leave the condo market?

According to a new report from Redfin, the desire for privacy is keeping a lid on condo prices, making that segment somewhat of a sleeper in terms of value.

The typical single-family home that sold in the U.S. this year was purchased for an average of 17.3% more ($58,000) than the typical condo. That’s up from 15.4% last year and represents the largest premium since at least 2013, when Redfin began recording this data.

 Sales data backs the trend — the median sale price of single-family homes surged 15.5% year over year in October, outpacing the condo market’s 9.9% growth.

Condos are also taking longer to sell—the typical condo spent 36 days on the market last month, compared with 27 days for the typical single-family home.

And less than a quarter (22.8%) of condos sold for more than their listing price, compared with 36.6% of single-family homes.

But condos have been catching up. According to Redfin, condo sales rose 22.7% in October from a year earlier, following a 50% plunge in the spring. That’s on par with the 23.3% growth in sales of single-family homes last month.

“Condos sales are rebounding because buyers are finding great deals,” said Redfin Chief Economist Daryl Fairweather in the report. “Families are fleeing cities in search of more space in the suburbs, which has presented an opportunity for millennials who are looking to become homeowners but don’t need extra bedrooms or a backyard.”

But extra space and a backyard come with a cost. The premium for an unattached home was the highest in Fort Lauderdale, where single-family homes sold for an average of 38.3% more than condos in October.

In Atlanta, single-family homes sold for an average of 21.6% more than condos in October, a premium of $60,441.

In the Seattle metro, where single-family homes are selling for a 17.9% premium, condos are taking several months to sell rather than the usual couple of weeks, according to local Redfin real estate agent Forrest Moody.

“Before the pandemic, it was challenging to find a condo in Seattle for less than $500,000, but now there are plenty selling for under $400,000,” Moody said in the report. “The people who are buying condos now are the people who couldn’t afford to buy one a couple of years ago because prices were so high,” he said. “I recently sold a condo that was within walking distance of Amazon’s headquarters for $510,000. Condos in that building normally go for $550,000 and up.”