Home buyers are being warned that if they're planning on buying a house this year, they're up against intense competition. The gap between the number of new for sale listings and the demand for homes keeps widening, causing what property experts are now describing as a 'frenzy' of bidding, with multiple offers made on almost all homes going on the market.
If you live in Ohio, for example, you'll have to act with lightning speed – homes in parts of this state have been selling in as little as four days, according to new data from real estate experts at Zillow. The Bay Area is also experiencing a boom, which will no surprise no one, and even New York City, which traditionally has slower sale times is now reporting an average time of just 28 days to sell a home, half what it was before the pandemic hit in 2020.
What's happening all around the country is that the number of new for sale listings remain very low. According to the latest research from Redfin, the number of new listings was down 12 percent year over year as of January 24, 2021, the lowest level since May 2020. At the same time, demand remained exceptionally strong – 60 percent up from the same time a year ago, the highest level of demand for property ever recorded.
It really is no wonder that what homes do go on sale get snapped up almost immediately, with 43 percent going under contract in two weeks or under. 'Buyers are incredibly hungry for listings, but unfortunately there isn’t much to choose from, and that scarcity is making buyers all the more frenzied,' said Redfin chief economist Daryl Fairweather. 'As a result, the majority of the homes that hit the market are getting multiple offers right away. Not only do you have to be fast to win a home, you have to be prepared and resourceful.'
By being resourceful, Daryl means being prepared to offer more on a home than its listing price – this will means buyers will have to rethink where and what they'll consider buying. Daryl recommends that 'buyers on a tight budget target homes that are priced 5 to 10 percent below their maximum price so they have room to increase their offer in a bidding war.'
There is one category of buyers who may benefit from the current property-buying frenzy, however: big city dwellers not planning on moving out to a larger property outside their metropolitan area. The current high demand is chiefly for suburban family homes, as Seattle Redfin real estate agent Scott Petrich explains: 'Now that the end of the pandemic is in sight, people will gradually start listing homes for sale. And once more companies and workplaces start calling employees back to the office, some homebuyer demand will shift back toward apartments and townhomes. Right now all the pressure is on single-family, suburban homes.'
In other words, if you're after an urban apartment, now may be your golden opportunity; if you are after a family homes in the suburbs, however, your best strategy may just be to sit it out until demand eases.