A record-setting 57% of homes that went under contract in the four week period ending Feb. 13 sold within two weeks of being listed, according to a report from Redfin, a technology-powered real estate brokerage.
With asking prices increasing by 16% year over year, people buying homes are also paying more than ever before with a median mortgage payment of $1,997 per month.
The pace and cost of home-buying were the result of new listings falling 8 percent year over year, which dampened pending sales. Sales fell 2.7% according to company officials
“The acute shortage of new listings of homes for sale is the biggest problem the housing market faces right now,” said Redfin Deputy Chief Economist Taylor Marr. “If you think of the housing market like a bathtub, water (supply of homes for sale) is flowing down the drain (buyers sucking up supply) faster than new water (new listings) is coming in through the faucet. Rising mortgage rates may slow the drain down a bit (cool demand) as record-high monthly payments take a toll on buyers’ budgets. Bottom line: without a flood of new listings, we will be sitting in a very shallow bath for a while.”
While rising interest rates are likely to slow competition somewhat by summer, Dallas-based Redfin real estate agent Barbara Tidwell-Vincent said potential home-buyers have “zero leverage to negotiate right now.”
“Even the homes that need work are hyper competitive thanks to all the investors in the market. Most of the homes hitting the market are listed by people who need to sell—estate sales, major life changes, that sort of thing," Tidwell-Vincent said. With so few homes for sale, everything is getting multiple offers. I had a client offer $70,000 over asking price, and we never even got a phone call back. It used to be that if you had good credit, a down payment, and all your financial ducks in a row, you could get a house. Not anymore. Just to compete you practically need a duffel bag full of cash.”
National median sales prices increased from a year earlier, according to Redfin, in all but one of the 88 largest metro areas it tracks. The only area with a decrease was Bridgeport, Conn., where home prices fell by 2% from a year earlier, following a 22% year over year increase in Jan. 2021. The largest price increases were in North Port, Fla., and Austin, Tx., which were up 32%, and Phoenix, Az,, which was up 29%, according to the company.
All 88 of the largest metro areas tracked by Redfin also posted year over year decreases in the number of seasonally adjusted active listings of homes for sale. The biggest declines in year over year active housing supplies occurred in Allentown, Pa, at 46%, Anaheim, Ca., at 42% and San Jose, Ca., at 41%.
