Even though the pandemic shut the country down for a while, the housing market is still going strong. During April, new listings dropped and there was a weak supply and demand but that did not detour the housing market hardiness. In fact, with loosening social distancing restrictions open houses are now occurring and there is a surge in bidding wars for homes under $1 million.
“Demand for homes has picked back up after hitting rock bottom in April, and that uptick paired with a lack of supply is a recipe for bidding wars,” said Redfin lead economist Taylor Marr. “Homebuyers are getting back out there, searching for more space as they realize using their home as an office and school may become the norm.”
According to Redfin, over 41% of listings were in a bidding war this month which is up 9% from January 2020 before COVID-19 hit. The high demand for homes combined with the limited listings on the market is a perfect receipt for bidding wars. Sellers are not rushing back into the market because of fear of the pandemic and the economy. Realtor.com reported that new listings for the week ending May 9th were 29% down annually.
As far as buyers, they are rushing to purchase a home as the mortgage rates are setting record lows. The federal regulators are currently offering the coronavirus mortgage bailout program. Compass, a real estate brokerage firm, says they have more buyer activity on their site than there are current listings.
“Buyers right now are saying to themselves, ‘I’ve been locked into my space for three months’ and they’re evaluating their — do they have enough space inside, outside? Do they have enough light? Do they have the right home office? If the answers to those questions are no, they call their agent,” said Robert Reffkin, CEO of real estate brokerage Compass. “And on top of that, you have record low interest 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.”
Across the nation, Boston saw the highest bidding wars this month. Along with Boston, San Francisco, Fort Worth, San Jose and Providence made up the top five regions for bidding wars.
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