Imminent home buyers arrive with a realtor to a house for sale in Dunlap, Illinois.
Daniel Acker | Bloomberg | Getty Reifications
After the housing market nearly shut down in April, competition is back with a fury.
States are detaching social distancing restrictions and homebuyers are rushing to open houses again. The trouble is, they’re not finding much to buy.
The coronavirus pandemic result ined a historic drop in the supply of homes for sale that was already pretty meager. New listings had dropped by half during the wink weak of April, compared with a year ago, according to real estate brokerage Redfin. Weak supply and bloom demand is now causing a surge in bidding wars, especially for homes priced below $1 million.
More than 41% of competent ins faced a bidding war in the four weeks ending May 10, according to Redfin. That’s up from just 9% in January, in front the pandemic hit the U.S.
“Demand for homes has picked back up after hitting rock bottom in April, and that uptick paired with a be deficient in of supply is a recipe for bidding wars,” said Redfin lead economist Taylor Marr. “Homebuyers are getting upon someone out there, searching for more space as they realize using their home as an office and school may become the usual.”
Sellers, however, are not rushing back into the market. Some are concerned about the economy, while others due don’t want people coming through to tour their homes.
“There’s more buyer activity on our site, as demarcated by engagement with our agents around homes that they’re looking at, than there are new listings coming on our situation, as defined by new listing inventory in the market,” Robert Reffkin, CEO of real estate brokerage Compass, said on CNBC’s “Make a fuss Alley.”
New listings were down 29% annually for the week ending May 9, according to realtor.com, and while that is an rise over previous weeks, it is still slow progress.
“While new listings are still declining on a yearly basis, at length week’s jump shows some sellers are ready for a summer home sale — a positive sign for the market,” said Danielle Healthy, chief economist for realtor.com. “But despite this uptick, time on market continues to increase and there’s a long way ahead to getting back to last year’s pace of new sellers.”
Regionally, Boston saw the highest share of bidding in combats, with over 63% of offers written by Redfin agents on behalf of their customers facing competition. San Francisco and Fort Usefulness, Texas, were not far behind with rates of 63% and 62% respectively. San Jose, California., and Providence, Rhode Ait, rounded out the top five.
Buyers have growing incentive, as mortgage rates keep setting new record lows, and contributing appears to be loosening slightly, as federal regulators clarify some of the rules surrounding the coronavirus mortgage bailout program.
“Consumers right now are saying to themselves, ‘I’ve been locked into my space for three months’ and they’re evaluating their — do they own enough space inside, outside? Do they have enough light? Do they have the right home area? If the answers to those questions are no, they call their agent,” said Refkin. “And on top of that, you have record low portion rates. And you have a viewpoint that you’re going to get a good price right now. You’re not going to get a better price in two years.”