Some of the key takeaways from a Redfin report on the housing market one year after the coronavirus pandemic began detail a surge in homebuying that spurred a housing shortage, along with intense bidding wars.
Redfin reports a 10 percent increase in U.S. home value from January 2020 to January 2021. The median home sale price in January 2021 was $330,500, up 14 percent from one year ago. That represents the largest annual gain in a month since 2013.
“Surging prices are helping local homeowners build equity, but also creating barriers to entry for many first-time buyers here in Albuquerque,” Redfin New Mexico real estate agent Austin Wolff said. “With so many affluent folks moving in from out of state, families who’ve been here for generations could get priced out.”
The report also said the supply of available homes dropped a record 24 percent year-over-year in January, highlighting the significant imbalance between buyers and sellers. That is also driving intense competition. Nationwide, 58 percent of Redfin home offers in January faced bidding wars, up from 53 percent in December.
“Inventory is so low that it has even been tough to get in to see homes at all,” Redfin Cleveland real estate agent Danielle Parent said. “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.”
Indeed, a Redfin-commissioned survey in November and December revealed 63 percent of those who bought a home in 2020 didn’t see the property in person before making an offer, compared to 32 percent in 2019. Technology like virtual tours and 3D walkthroughs are helping make sight-unseen purchases more feasible. Redfin saw 3D walkthrough views skyrocket 581 percent on its website since the beginning of the pandemic.
Redfin also reported a jump in sales of luxury homes and second homes, as more workers bought vacation homes and worked remotely. The sale of luxury homes rose 45 percent year-over-year from November 2020 to January 2021, more than any other price tier. Second homes soared 84 percent year-over-year in January, according to Redfin’s analysis of mortgage-rate lock data from Optimal Blue.
More people also looked to relocate, Redfin reported, as 30 percent of its users were interested in moving to a different metro area in the fourth quarter of 2020, up from 26 percent a year earlier. There was also a surge in interest in rural areas, as pageviews of small-town and rural-area homes on Redfin.com rose by 79 percent year-over-year in January, after soaring by 200 percent in August.