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Limited housing inventory is helping the industry break new records, however, a slight increase in inventory could be on the way. A Redfin report revealed that 55% of pending homes found buyers within 14 days for the 4-week period ending Jan. 24, 2021. This marks the largest share of pending homes to find buyers in as quick as two weeks in nine years.
"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. I recommend 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."
According to the report, pending home sales were up 30% year-over-year and new listings of homes for sale were down 12%, the largest decline since May 2020.
"43% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 35% rate during the same period a year ago," according to the report. "During the week ending January 24, this measure hit 55%—the highest point since at least 2012 (as far back as Redfin's data for this measure goes)."
"The inventory is there; it's lying in wait," said Seattle Redfin real estate agent Scott Petrich. "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."
For the week ending Jan. 24, 2021, the seasonally adjusted Redfin Homebuyer Demand Index, which measures requests for home tours and other services from Redfin agents—was up 60% from pre-pandemic levels in January and February of 2020—the highest level on record.
Click here to learn more from Redfin's latest report.