Buyers Still Must Think Fast, Act Fast
Home buyers don’t have much time to decide whether they want a house or not. As soon as a listing hits the market, the rush is on. Home sales between July 2020 and June 2021 were on the market for a median of just one week before going under contract, according to the National Association of REALTORS®’ newly released 2021 Profile of Home Buyers and Sellers. That marks a record low in NAR data dating back to 1989.
“There’s no plotting of where the Christmas tree will be and measuring for a couch in that scenario,” Jessica Lautz, NAR’s vice president of demographics and behavioral insights, told The Wall Street Journal. “You really are making that decision very fast.”
Home shoppers Anshul and Angharad Bhardwaj told The Wall Street Journal they made more than 20 unsuccessful offers on homes since they started their house hunt in Salt Lake City in September 2020. They finally were successful in February after making an offer on a home within an hour of touring it, even though they were still told it was already under contract. They submitted a backup offer and purchased the house for $780,000 after the initial offer fell through.
Virtual showing tools are helping buyers visit houses quicker. Forty-three percent of buyers found virtual tour options to be particularly useful over the past year, according to NAR’s report.
To make their offers more competitive, some buyers continue to forgo appraisals and home inspections. Twenty-one percent of buyers waived their inspection contingency in September and 23% waived their appraisal contingency, according to the REALTORS® Confidence Index Survey for September.
With competition so stiff, buyers are paying full asking price or more as well. The median sales price was the full asking price in June, the highest on record in NAR’s data. The median sales price was $305,000, an increase from $272,500 compared to a year ago, according to NAR.
In the third quarter, 66% of active home buyers said they spent three months or more searching for a home without success, according to a survey from the National Association of Home Builders. Forty-five percent of prospective buyers say they keep getting outbid by other offers from buyers. (Read more: Bidding Wars Still Burden Unsuccessful Buyers)
Some recent housing reports have seen signs of a cooling period in many markets, following the typical seasonal pattern. But real estate pros say demand remains high for the limited number of homes for sale, and buyers still don’t have much time to reflect on homes or wait to submit offers. “Instead of a house lasting three days on the market, it’s lasting seven days,” Harold Torres, a real estate professional in Orlando, Fla., told The Wall Street Journal, putting the cooling period into perspective. For house hunters, “negotiation and any type of wiggle room is not really there yet.”
