Many people are sitting on the fence trying to decide if now’s the time to buy a home. Some are renters who have a strong desire to become homeowners but are unsure if buying right now
Real estate barometer readings after a challenging year
Dated: April 9 2021
As we begin experiencing the 1-year anniversary of pandemic-mandated stay-at-home orders that halted both home-buying and home-selling activity, it's time to review how the housing market has changed over the past year. According to Redfin's Tim Ellis, median home-sale prices increased 17% year over year to $335,613, an all-time high, while asking prices of newly listed homes rose 14% year-over-year to $353,500 yet another all-time high.
It's not surprising that pending home sales were up 38% from the same period in 2020 and up 28% from the same period 2019, which was a more typical year for the housing market. With an extremely limited inventory, new listings of homes for sale were down 2% from the same period in 2020 and down 5% from the same period in 2019, while active listings (the number of homes listed for sale at any point during the period) fell 42% from the same period in 2020 to a new all-time low. "This is the largest decrease on record in this data, which goes back through 2016," says Ellis.
Nearly 60% of homes that went under contract had an accepted offer within the first two weeks on the market, which represents a new all-time high for this measure since as far back as Redfin's data for this measure goes (2012). And during the 7-day period ending March 28, 61% of homes sold in two weeks or less.
And yes. It's still a jungle out there, with 41% of homes selling for more than their list price, an all-time high and 16 percentage points higher than the same period a year earlier, according to Ellis. "The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased to 100.4%, an all-time high and 2 percentage points higher than a year earlier," he adds.
Ellis quotes Redfin's Chief Economist Daryl Fairweather, who says, "Some homebuyers have reached their limit on bidding wars and soaring prices. Add to the mix a dwindling number of homes for sale and rising mortgage rates, and the typical family that is still searching for an affordable house may have missed the boat." She adds, "First-time homebuyers who were already stretching their budgets will have to make bigger compromises on size and location or resign to renting for another year. However, those who are flexible should look to the condo market where there's still a bit less competition."
Fairweather looks to the future, saying that the new administration's infrastructure plan evidently aims to incentivize zoning for multifamily homes, which could increase the supply of affordable homes and provide even more people a path to homeownership, but there is no guarantee the incentives would be enough for local governments to change their zoning practices.
Source: Redfin | TBWS
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