It was one year ago this month that the World Health Organization declared Covid-19 a pandemic. Coronavirus has upended nearly every aspect of our daily lives, including where we live and where we work. For many people, both are now in the same location.
It’s been no different for buying and selling homes across the country this past year. Restrictions and lockdowns forced agents to pivot by showing houses virtually but still the red-hot market continued to thrive.
Despite a recession, U.S. homeowners have gained $3.1 trillion in home value because of rising house prices. The total worth of homes across the country was up 10% in January at $32.4 trillion compared to $29.3 trillion a year earlier.
In January, the median home sale price was $330,500, up 14.3% from a year ago. This has been the biggest annual gain during a given 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,” said Redfin New Mexico real estate agent Austin Wolff. “With so many affluent folks moving in from out of state, families who’ve been here for generations could get priced out. But beginner buyers shouldn’t give up. I’ve had clients win homes by using creative strategies that don’t require a huge down payment or the highest bid.”
There has been a record decline in inventory causing a massive housing shortage. There are many more buyers than there are sellers. This is the case every year, but the imbalance has intensified during the past year. Supply of home sales plummeted a record 23.6% year over year in January as many Americans relocated and purchased homes thanks to remote work and ultra-low mortgage rates. The inventory shortage has also caused skyrocketing home prices and fierce bidding wars.
“Inventory is so low that it has even been tough to get in to see homes at all,” said Redfin Cleveland real estate agent Danielle Parent. “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.”
Almost 63% of people who bought a home in the past year made an offer on a property sight-unseen compared to just 32% in 2019. This is the highest percentage since at least 2015. Some homebuyers felt buying a home without previously seeing the property was the safer option during the pandemic, while others choose this route because it allows them to submit a quicker and more competitive bid.
Nearly 25% of listings mention home offices in January compared to almost 23% a year earlier, a feature that has grown in popularity due to so many spending so much time at home. Properties with nice views have also gained popularity, 16.7% of listings. Other highlights include home listings that mention spas (17.2%), pools (13%) and lakes (5.7%)
To read the full report from Redfin complete with charts, click here.