Tag: market data

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.

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.”