Housing Market Roundup Oct. 7, 2021
Here’s a summary of current housing market reports that came across the MBA NewsLink desk:
Home Sellers Getting More Multiple Offers
A Zillow Group Population Science survey of 2,000 recent home sellers found nearly one-fourth received four or more offers for their home, up sharply from 2020.
The Zillow Consumer Housing Trends Report 2021 also reported despite a global pandemic, historic economic change and an unprecedented shift in the housing market, many behaviors and attitudes remain the same.
Consistent with the past three years, the report said the typical seller got two offers, but 24% of sellers reported getting four offers or more offers this year, up from 14% in 2020. On average, sellers said no offers fell through.
Most sellers (74%) said that at least one of the offers they received was all cash or did not include a financing contingency. This is consistent with 77% of agents reporting that they sometimes submitted an all-cash offer on behalf of their clients. The report noted the fact that more than two thirds (68%) of buyers purchased without a mortgage, though, suggests that buyers that finance with a mortgage can still compete with cash offers — assuming their offer is sufficiently appealing in other ways.
Most sellers (65%) also reported they received at least one offer that waived an inspection. However, 88% of successful buyers said they got an inspection prior to finalizing their home purchase.
The report also had good news for real estate agents: Rising digital options such as remote viewings, 3D tours and instant offers appear to complement the services that real estate agents offer, not replace them. The share of sellers that use a real estate agent has remained unchanged (82%) over the past three years. Furthermore, among sellers who also bought a home, 62% of those that work with an agent to sell use the same agent to buy.
The typical seller still has only one open house, but the share that forego open houses entirely increased among those surveyed in 2021: 43% said they had none, compared to 39% in 2020. And three quarters of sellers (72%)said they never take their home off the market until it is sold.
ATTOM: October ‘Ripe’ for Homebuyers
ATTOM, Irvine, Calif., said its annual analysis of the best time of the year to buy a home shows October, as well as the winter months, offer homebuyers the best deals – fetching lower premiums than other months of the year.
The report said buyers who close in October will get the best deal compared to the spring buying season. While the premium is still above market value, homebuyers are only dealing with a 2.9% premium, as opposed to May, when homebuyers are experiencing an 11.5% premium.
Nationally, days that fall in December offer the lowest premium for homebuyers. With December 5 seeing a 1.6% premium, December 26 a 2% premium, January 6 a 2.2% premium, November 9 a 2.3% premium and December 31 a 2.4% premium. A far cry from May, where May 23 and 27 offer a 17.4% premium, May 20 a 16.6% premium, May 16 a 15.6% premium and May 19 a 15.4% premium.
The study said states realizing the biggest discounts below full market value were Delaware (-7.9% in February); Tennessee (-7% in January); New Jersey (-4.9% in February); Maryland (-4.8% in November); and Ohio (-4.8% in January).
Redfin: Price Growth Slows in Wildfire-Struck California Towns
Redfin, Seattle, said in the three years following major fires, home prices rose by 21% in directly hit areas on average, compared to 33% growth just outside of fire zones.
The report said in areas within fire perimeters, home purchases declined by an average of 38% during the three years after the blazes. That’s in part because when homes in a community burn down, there are fewer properties available to sell, said Redfin Chief Economist Daryl Fairweather. By comparison, purchases only declined an average of 3% in areas that surrounded the fires. Home purchases inside the fire perimeters suffered the most during the first year after the fires, plummeting 43%. By year three, that decline had shrunk to 29%, as more homes were rebuilt and memories of the fires grew increasingly distant.
“Like much of the U.S., California is facing an acute housing shortage,” Fairweather said. “That means there are often intense bidding wars for the homes that are for sale—even those in fire-prone areas—which contributes to the rise in prices. The wildfires themselves are also making housing more expensive. After a town burns, builders come in and construct new homes, which are typically more expensive. And homeowners who stay frequently invest in making their homes more fireproof, which increases property value.”
HUD Issues Rule Protecting Tenants Facing Evictions for Non-Payment of Rent
HUD on Wednesday announced it will publish a rule that prohibits eviction of tenants facing eviction for nonpayment of rent from HUD-subsidized public housing and certain properties with project-based rental assistance without providing a 30-day notice period that includes information about available federal emergency rental assistance.
The interim rule, published in the Federal Register on October 7, provides that when there is a national emergency—such as the COVID-19 pandemic—and federal money is allocated to help tenants facing eviction for nonpayment of rent, the HUD Secretary can (1) Expand the notice a covered landlord must give before such a tenant must vacate a unit from 14 days to 30 days; (2) Require landlords to provide information to the tenant regarding federal emergency rental relief along with the eviction notice; and (3) Require landlords to provide notice to all tenants in public housing of the availability of emergency rental assistance. Separately, HUD is publishing notices that invoke this new rule’s authority and require the provision of information regarding the Emergency Rental Assistance Program.
Bankrate.com: Millennials Have Own Ideas About Tapping Equity
A recent Bankrate survey (https://www.bankrate.com/pdfs/pr/20210818-august-fsp.pdf) found 14% of millennial mortgage holders (ages 25-40) say they would tap home equity to bankroll a vacation, compared to just 4% of Gen X (ages 41-56) and 3% of baby boomer mortgage holders (ages 57-75).
Similarly, 10% of millennials say they would pull cash from their homes for non-essential purchases, such as electronics or a boat, versus 3% of both Gen Xers and baby boomers with a mortgage. Millennial homeowners were also more likely to say they would tap home equity to make other investments (26%) compared to Gen X (17%) and baby boomer mortgage holders (10%).
The survey said 28% of millennial mortgage holders would cash out home equity to help keep up with household bills, compared to 17% of Gen X and 14% of baby boomers. However, only 49% of millennials say they would tap home equity to finance home improvements, compared to 64% of Gen Xers and 66% of baby boomers with a mortgage.