Home buying demand continues to gain steam as more and more cities and states look to end shelter-in-place orders and re-open sections of the economy, according to Redfin. But lagging new listings are struggling to keep up with demand, prompting affordable homes to sell at lightning speed.
After plunging as much as 34 percent in March, home-buying demand is only 15 percent from pre-pandemic levels, for the seven days ended April 26, according to Adam Weiner, Redfin’s chief growth officer, who provided the weekly update.
The modest increase in new listings has led to low inventory. In the seven days ending on April 24, only 53,000 new homes hit the market and the week prior only 48,000 new homes hit the market.
“Despite the increase in new listings over the past two weeks, there were fewer than 700,000 homes for sale in Redfin markets across the U.S., which is the lowest inventory level we’ve seen anytime in the past five years,” Weiner wrote.
“Some of the new inventory hitting the market may be coming from buy-and-hold investors,” Weiner added. “Since the beginning of the pandemic, we’ve heard stories of Airbnb landlords with sudden unexpected vacancy putting their homes up for sale.”
Home prices are holding steady despite the global uncertainty. For the seven days ending April 24, the median listing price was up 1 percent year-over-year. Buyers and sellers are in a deadlock, according to the survey.
“Affordable, single-family homes is the segment of the market where sellers have the biggest advantage,” Weiner wrote. “Agents across the country are reporting that these homes often generate bidding wars with prices sometimes escalating tens of thousands of dollars above the asking price.”
Sellers also aren’t dropping prices, Redfin’s survey found. Just 3 percent of homes on the market had a price drop last week, which is the same as last year and below the 4 percent average in January and February 2020.