The extreme pandemic-driven seller’s market is intensifying and will likely last through the first half of the year, according to a report from Redfin, the technology-powered real estate brokerage.
In the week ending January 24, home-sale prices soared 18% and pending sales grew 28% from the same period last year. Fifty-five percent of homes that went under contract that week found a buyer in 14 days or less — the largest share to sell that quickly in at least nine years (Redfin data on this measure goes back through 2012).
“The main thing going on is scarcity of homes for sale. There’s nothing there, so people want it even more,” said Seattle Redfin real estate agent Scott Petrich. “Potential homebuyers who don’t have a good amount of savings are having a very hard time getting a house right now because the lack of supply is driving up prices, while low mortgage rates increase demand.”
Both the number of homes for sale — down 36% from a year ago during the week ending January 24 — and the rate that new homes are being listed for sale—down 13%—are falling from last year’s already low levels. The average home spent just 34 days on the market before selling, 20 days less than the same time a year ago and also a record low for this time of year as far back as our data for this measure goes.
“There will continue to be a lack of new listings in early 2021,” said Redfin Chief Economist Daryl Fairweather. “But rock-bottom mortgage rates will have buyers eager to purchase the few listings that do hit the market. So I expect bidding wars, fast sales and double-digit price growth to continue. We are at a point in the pandemic where would-be sellers are expecting to be vaccinated in the next six months, so they may be waiting for that before selling. Once many more people are vaccinated for the coronavirus and more homeowners start to feel comfortable listing their homes for sale, the current deadlock of housing supply should start to loosen. Mortgage rates could inch up at the same time, which could bring a slight chill to the scorching-hot seller’s market.”
Homebuying demand, which typically slows through the winter, is 60% above where it was last year, according to the Redfin Homebuyer Demand Index.
