Online Home Shopping Activity Up—Way Up
Reports from Zillow, Seattle, and Redfin, Seattle suggest prospective home buyers are adapting to the Age of Coronavirus by significantly upping their online searches and tours.
Zillow said web traffic on its for-sale listings and requests to connect with its Premier Agents have ticked up recently after slowing in the early days of the U.S. coronavirus pandemic in mid-March. Page views on for-sale listings on Zillow fell as much as 19% year-over-year for the week ending March 22, but have largely recovered. They jumped by 18% year-over-year for the week ending April 15.
Redfin said it saw a 494% increase in requests for agent-led video home tours last month. It said one-third of home-tour requests made by customers last week were for agent-led video-chat tours, up from less than 1% during the first week of March. Additionally, of the offers signed last week, 12% were signed by customers who had toured the home they made an offer on via video, double the prior week’s share, and up from close to zero at the beginning of March.
Zillow Economist Jeff Tucker said taken together, data suggest more buyers are considering a home purchase and agents, sellers and buyers are becoming more comfortable using virtual technology during the process while practicing social distancing.
Zillow noted in early March, daily web traffic on its website — measured for this analysis by page views on for-sale listings using a seven-day trailing average — trended somewhat higher than on corresponding days a year earlier. The trendline took a turn after March 11, dropping to as much as 19% below 2019 levels for the seven days ending March 22. But traffic has since picked up, outpacing or remaining just a few percentage points behind 2019 levels through early April.
An additional signal in home shopping behavior is the rate at which Zillow visitors submit online requests to connect with a real estate agent. While online requests to connect with a Zillow Premier Agent dropped steeply in mid-March, they have since bounced back. As of April 15, online Premier Agent connection requests were higher than they were a year ago, due in part to increased video tour connections offered.
“These are encouraging signals and time will tell if this interest will turn into more offers to buy and transactions,” Tucker said. “The coronavirus pandemic has already cost an unprecedented number of people their jobs, which will force many to put plans for a home purchase on hold. Time will tell whether areas of the country with sharper increases in homebuyer interest see quicker economic recoveries, if consumers are feeling confident enough to consider a big purchase like a new home.”
Zillow said the number of homes for sale grew 2.5% between March 1 and April 5, but inventory was still relatively low because the market was tight before the pandemic took hold. New listings, which typically garner the most attention, were down 27.1% year-over-year as of April 5.
Meanwhile, Redfin said since early March, it has been implementing a wide range of measures in response to the coronavirus, including letting homebuyers request agent-led video-chat tours with a single click on Redfin.com and the company’s iOS and Android apps. On April 4, the company began piloting live video open houses via Zoom in three markets: Portland, Ore., Boston and Oklahoma City.
“Being in a city like Portland where many people want to live, I’ve been doing video-chat tours for out-of-town customers for a long time,” said Redfin Portland agent Daniel Brooks. “The biggest difference we’re seeing today is that people already living in Portland are requesting them now too. I think we’ll see local residents doing more video tours and open houses long after the pandemic is over—once people do one, they realize what a convenient way it is to see a home without driving across town.”
Digital closings with Redfin subsidiaries Title Forward and Redfin Mortgage have also spiked in recent weeks. In the first five days of April, 10% of deals that were closed with Title Forward were done electronically, up from an average of 3% in March and 1% in February. At Redfin Mortgage, nearly 12% of April closings are expected to be entirely virtual—twice the share we saw in March and up from zero in February.
Additionally, Redfin said it implemented three-dimensional scans of nearly every Redfin listing, replacing open-houses with an online, interactive experience. In 2014, Redfin invested in these scans as a standard feature for the majority of homes listed by Redfin, but now views of these scans are up 9% in March as compared to February. For the month of March, Redfin said it hosed nearly half a million virtual open houses, where an online visitor interacts with the three-dimensional scan.
“The future of real estate has come earlier than any of us could have anticipated,” said Redfin CEO Glenn Kelman. “The way things are during the pandemic won’t last forever, but at the end of all this, things won’t go back to the way they were either. We hope we’re well prepared.”