Record-low mortgage rates and remote work are driving scores of Americans to buy bigger homes in more affordable places, but those same factors are fueling fierce bidding wars, skyrocketing prices and an intensifying housing shortage.
/PRNewswire/ — (NASDAQ: RDFN) — As the world approaches the one-year anniversary of the World Health Organization declaring Covid-19 a pandemic, a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage, looks back on its impact on the U.S. housing market. The coronavirus has upended just about every aspect of daily life, including where Americans live, what they look for in a home and how they go about the homebuying process. Redfin created 12 charts that illustrate the pandemic’s profound impact on the U.S. housing market, available in the full report and summarized below.
$3.1 trillion: The amount of home value Americans have gained
Despite the economy’s plunge into recession, U.S. homeowners have reaped $3.1 trillion in home value during the pandemic as a result of rising housing prices. The total worth of U.S. homes was $32.4 trillion in January, up 10% from $29.3 trillion a year earlier.
2013: The last time U.S. home prices surged this much
The median home sale price in the U.S. was $330,500 in January, up 14.3% from a year earlier. That’s the biggest annual gain during a given month since at least 2013.
“Surging prices are helping local homeowners build equity, but also creating barriers to entry for many first-time buyers here in Albuquerque,” said Redfin New Mexico real estate agent Austin Wolff. “With so many affluent folks moving in from out of state, families who’ve been here for generations could get priced out. But beginner buyers shouldn’t give up. I’ve had clients win homes by using creative strategies that don’t require a huge down payment or the highest bid.”
24%: The record decline in inventory that’s driving a massive housing shortage
There are significantly more buyers than there are sellers—an imbalance that has existed for years but has significantly intensified during the pandemic. The supply of homes for sale plummeted a record 23.6% year over year in January as scores of Americans relocated and purchased homes thanks to low mortgage rates and remote work. The inventory shortage has acted as a catalyst for many of the other housing-market shifts the country has seen over the past year, including skyrocketing prices and fierce bidding wars.
“Inventory is so low that it has even been tough to get in to see homes at all,” said Redfin Cleveland real estate agent Danielle Parent. “It’s a very, very challenging market for buyers, so I’m telling my clients that they should always have second- and third-choice homes in mind and may want to consider making offers sight-unseen.”
58%: The share of home offers facing bidding wars as competition intensifies
The U.S. is currently in one of the most competitive housing markets in history. Nationwide, 58.3% of home offers written by Redfin agents faced bidding wars in January, up from 53.3% in December. That marks the ninth-straight month in which more than half of offers encountered competition.
Another sign of intense competition is homes selling quickly and fetching more than the sellers originally ask for. The typical home that sold in January went under contract in 34 days—22 days fewer than a year earlier—and a third (32.9%) of homes sold for above their listing prices, compared with 18.9% a year earlier.
45%: The jump in luxury-home sales that outpaced the increase in affordable-home sales by a factor of five
Sales of luxury homes surged 45% year over year during the three months ending Jan. 31—more than any other price tier—as affluent Americans bought vacation homes and worked remotely. By comparison, home sales in the affordable price tier grew just 9%.
84%: The growth in demand for second homes
Similarly, demand for second homes jumped 84% year over year in January, outpacing the 36% increase in demand for primary homes. That’s according to a Redfin analysis of mortgage-rate lock data from real estate analytics firm Optimal Blue.
2.7 million: The number of U.S. homeowners in forbearance
About 5% of U.S. homeowners, or 2.7 million Americans, were in forbearance as of Feb. 16, down from a peak of 4.8 million (9%) in May, according to data provider Black Knight. The U.S. government enacted the CARES Act in March, allowing Americans to enroll in forbearance programs if they’re struggling to pay the bills during the economic crisis brought on by the coronavirus pandemic.
30%: The percentage of Redfin.com users looking to relocate
Nationwide, 30.3% of Redfin.com users looked to move to a different metro area in the fourth quarter of 2020, up from 29.2% in the third quarter and 26.2% a year earlier. This figure ticked even higher—to a record 30.7%—in January, the most recent month for which data was available. Relatively affordable and warm locales including Austin, TX, Phoenix, Las Vegas, Dallas, Atlanta, Sacramento, CA and Miami have seen among the largest net inflows, meaning more people are looking to move in than leave. These places have attracted people from dense, costly cities including San Francisco, Los Angeles and New York City.
One-third: The share of Redfin.com saved searches that filter exclusively for single-family homes
Single-family homes are back in vogue as Americans spend lots of time inside during the pandemic. A third (32.9%) of saved searches created by Redfin.com users filtered solely for single-family homes in January, following a peak of 37.2% in July. Meanwhile, the share of searches specifically for other types of homes, such as condos, townhouses and multifamily listings, is much lower; just 7.5% of saved Redfin searches excluded single-family homes in January.
79%: The rise in pageviews of homes in rural areas
Redfin.com pageviews of homes in both small towns and rural areas jumped nearly 80% year over year in January (after climbing more than 200% in August), outpacing the 51% increase in pageviews of homes in large metropolitan areas. While that gap has narrowed since the summer, large metro areas continue to experience smaller annual increases in pageview growth than rural areas and small towns—a dynamic that existed before the pandemic, but on a much smaller scale.
63%: The record-high portion of homebuyers making offers sight-unseen
Almost two-thirds (63%) of people who bought a home in 2020 made an offer on a property that they hadn’t seen in person, up from 32% in 2019 and the highest share since at least 2015, according to a Redfin-commissioned survey in November and December of more than 1,900 homebuyers across 32 major markets. Some homebuyers may make offers sight-unseen because they feel it’s a safer option during the coronavirus pandemic, while others go this route because it allows them to submit quicker and oftentimes more competitive bids.
Purchasing a home sight-unseen has become more feasible during the pandemic thanks to high-quality 3D walkthroughs and virtual tours. Views of 3D walkthroughs on Redfin.com have soared 581% since the beginning of the pandemic. On average, 12% of home-tour requests made by Redfin customers so far in 2021 have been requests for agent-led video-chat tours, up from less than 1% in February 2020—before the coronavirus was declared a pandemic.
1 in 4: The share of listings that mention home offices
With Americans spending so much time at home, features including home offices and nice views have grown in popularity. A quarter (24.9%) of listings mentioned home offices in January, up from 22.9% a year earlier (+8.7% year over year), according to a Redfin analysis of multiple listing service (MLS) data. Other January highlights include:
- 16.7% of homes listings mentioned views (+8.4% year over year)
- 17.2% of home listings mentioned spas (+6.8% year over year)
- 13.0% of home listings mentioned pools (+2.4% year over year)
- 5.7% of home listings mentioned lakes (+9.6% year over year)
To read the full report complete with charts, please visit: https://www.redfin.com/news/coronavirus-pandemic-real-estate-impact-charts
Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer’s favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country’s #1 nationwide brokerage website, offering a host of online tools to consumers, including the Redfin Estimate. We represent people buying and selling homes in over 95 markets in the United States and Canada. Since our launch in 2006, we have saved our customers nearly $1 billion and we’ve helped them buy or sell more than 310,000 homes worth more than $152 billion.
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