American home buyers are having to pounce faster than ever to clinch a deal, forcing many of them to make snap decisions about what house to purchase and where to live.
Home sales between July 2020 and June 2021 sat on the market for a median period of only one week before going under contract, according to a survey released Thursday by the National Association of Realtors. That’s down from three weeks a year earlier and marks a record low in data going back to 1989.
The rapid turnover helps explain how the number of homes sold rose to multiyear highs during the Covid-19 pandemic, even as the inventory of homes for sale remained stubbornly low.
The pandemic caused a surge in home-buying demand. Households sought more space to work remotely and took advantage of low mortgage-interest rates.
At the same time, supply has been constrained. Caution about showing homes during Covid-19, a reluctance among some owners to enter the competitive housing market and the ability to refinance at low rates kept many prospective sellers from listing their homes.
Tools that enabled shoppers to tour houses remotely and schedule showings online also helped speed up the home-buying process in the past year, real-estate agents say.
In such a fast-moving market, buyers have little time to commit to one of the biggest purchases of their lives and sometimes forego traditional safeguards. Many buyers have waived their rights to terminate a contract because of a low appraisal or unfavorable inspection to make their offers more competitive in a bidding war.
“There’s no plotting of where the Christmas tree will be and measuring for a couch in that scenario,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “You really are making that decision very fast.”
In September, the markets where homes sold the fastest were Indianapolis; Denver; Grand Rapids, Mich.; Seattle and Tacoma, Wash., according to real-estate brokerage Redfin Corp.
Homes typically sell slightly below their listing price, but in the year ended in June the median sales price was 100% of the listing price, the highest since NAR started tracking the data in 2002. The median sale price for that period was $305,000, up from $272,500 the prior year, NAR said.
The continued shortage of homes on the market means many buyers are stuck on the sidelines. About two-thirds of active buyers have been house-hunting for at least three months, according to a September survey from the National Association of Home Builders. About 45% of those shoppers said they hadn’t been successful because they kept getting outbid by other buyers.
The hot housing market has cooled slightly in recent months, but real-estate agents say many homes are still selling quickly and with multiple offers. Active listings in the four weeks ended Oct. 31 fell 22% from a year earlier, according to Redfin.
“Instead of a house lasting three days on the market, it’s lasting seven days,” said Harold Torres, a real-estate agent in Orlando, Fla. For buyers, “negotiation and any type of wiggle room is not really there yet.”
The NAR survey also showed that buyers weren’t venturing far when purchasing a new home. The typical distance between a buyer’s previous residence and their new one was just 15 miles in the year ended in June, the survey showed. Buyers said their top reasons for choosing an area were neighborhood quality and convenience to friends and family, a change from the preceding year, when affordability and convenience to jobs outranked proximity to friends and family.
“Our priorities have changed,” Dr. Lautz said. “We needed our support system in the last year-and-a-half.”
NAR polled about 5,800 people who bought primary homes in the year ended in June.
News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from NAR.