With so few home listings around, prospective home buyers have very little time to make up their minds on whether or not they intend to bid on a house they’ve seen.
The reality is that as soon as a listing lands on the market, the race is on. Between July 2020 and June 2021, the average home was on the market for just one week before going under contract, according to the National Association of Realtor’s newly published 2021 Profile of Home Buyers and Sellers.
That’s a record low for time on market in NAR data stretching back to 1989.
“There’s no plotting of where the Christmas tree will be and measuring for a couch in that scenarios,” said NAR Vice President of Demographics and Behavioral Insights Jessica Lautz, in an interview with the Wall Street Journal. “You really are making that decision very fast.”
One couple, Anshul and Angharad Bhardwaj, told the Journal of their struggle to buy a home that saw them make more than 20 unsuccessful bids on homes in Salt Lake City when they began hunting for one in September 2020. They were finally successful after a search lasting more than five months, when they made an offer on a home within an hour of seeing it last February. They were told immediately afterwards that the home was already under contract, though their backup offer of $780,000 was eventually accepted after the first transaction fell through.
Experts say virtual tour technology is helping buyers visit, and bid on homes faster than ever before. The NAR’s survey found that 43% of buyers thought virtual tour options were “particularly useful”.
Data has also revealed how numerous buyers are increasing the competitiveness of their offers by forgoing appraisals and home inspections. Some 21% said they waived the appraisal contingency when they bought a home, the September Realtor’s Confidence Index Survey found.
Many buyers are bidding above the asking price too, the NAR’s survey found. The median sales price was the full asking price in June, the highest on record in the NAR’s data. The median sales price was $305,000, an increase from $272,500 compared to a year ago.
Buyers also report their home searches are taking longer. According to another recent survey by the National Association of Home Builders, 66% of home buyers in the third quarter said they spent three months or longer looking for a home, without success. One of the main reason for their failure to buy a home is that their offers were outbid on multiple occasions by other buyers, according to 45% of respondents in that survey.
There have been reports suggesting the housing market might be cooling off in some parts of the country, in line with traditional seasonal patterns. But real estate agents report that demand remains exceptionally high for what listings exist, and say buyers still don’t have much time to consider if they don’t want to miss out.
Orlando, Florida-based real estate pro Harold Torres told the Journal the only real difference now is that, instead of homes going under contract within three days, they’re lasting about seven days at the most. “For house hunters, negotiation and any type of wiggle room is not really there yet,” he said.