Anecdotal evidence that the late-2020-into-early-2021 real estate market was hot but new data from Zillow’s Consumer Housing Trends Report debunks a common misconception that all buyers experienced a grim reality when it came to home buying. The record-setting housing market that begin several months after the onset of the covid-19 pandemic brought reports of frustrated potential buyers being repeatedly outbid but according to the new analysis it was mostly challenging for first-time buyers.
The survey found first-time buyers struggled more than repeat buyers. Typically, first-time buyers have smaller down payments because they are less likely to have equity from a previous home which can make their offers seem less competitive. About 67% of first-time buyers submit more than one offer, compared to 54% of repeat buyers.
“Our 2021 survey of buyers found buying a home got more challenging in the past year, but many buyers were ultimately successful in landing a home without taking unnecessary risks,” said Manny Garcia, a Zillow population scientist. “Most buyers continue to get inspections, and sellers appear to prioritize higher offers over waived inspections. Most buyers are ultimately achieving home-ownership by doing their research, making trade-offs and considering a diverse array of options.”
In 2020 and 2021, the average buyer went on three private tours. That is up from just one in previous years. Only 5% skipped a private tour completely. Most home shoppers are still going to at least one open house depside the pandemic.
“So many buyers are hearing horror stories from friends and family about the housing market, so it’s important to educate buyers about the local market so they can make the best decision for their family,” says Tom Toole, team lead at Tom Toole Sales Group at RE/MAX Main Line. “Buyers still strongly prefer in-person tours, but virtual tours help people see a home if circumstances don’t allow and have helped a number of buyers get a speed advantage in the market. ‘Virtual‘ tools are a great addition to help buyers decide what houses they want to go see in person.”
In-person viewing has remained a priority for home buyers but the desire for 3D and virtual tours are increasing from years past. Survey participants agreed that 3D tours would help them get a better feel for the home than just static pictures. This proves that virtual tools are valued by potential buyers because they make it easier to shop for a home. The share of shoppers who say they are somewhat confident making an offer after only seeing a virtual tour and not an in-person viewing, increased to 58% this year, an increase from 3% last year.
This quarter has shown signs of cooling as home-value appreciation begins to slow and inventory continues to grow each month. Although sellers are still in control, buyers may find more options and less competition which potentially could make a more manageable market.
You can read the full report from Zillow here.
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