- Buyer competition continued to increase in February
- Increased competition led to double digit price growth and record-time selling pace
Buyer Competition Intensifies in February
According to the National Association of REALTORS® (NAR) February 2021 REALTOR Confidence Index Report, there were, on average, four buyer offers on every home sold. This 4:1 ratio compares with 2-3:1 ratio one year ago
This growing intensity in competition among homebuyers led to double-digit price growth and properties selling in record-flash time.
Homes Sold in 20 Days Nationally
Countrywide, residential properties were sold in 20 days (median), the lowest record since 2012. REALTORS®indicated that in February, 74% of existing homes were on the market for less than 30 days. In the states of Idaho and South Dakota, properties were sold at 15 days (median).
Redfin indicated that 57% of homes went under contract in less than 2 weeks and that 47% of homes went under contract in less than one week.
REALTORS® reported that in the West, properties ranging in price from $250,000 – $750,000 sold within 8 days. In the South, homes within that same price range sold in about 2 weeks.
Healthy Supply Level Would Require Additional 2.7M For-Sale Homes
A healthy supply level of for-sale homes is equivalent to 6 months of monthly demand. To meet such a supply level would require an additional 2.7M on the market for sale, according to NAR.
Without this 6-month supply level, just increase home price appreciation by 2-3 percentages points per every month below that healthy level of 6 months.
“Homes Have Become a Luxury Good”
As of January 2021, the supply level of for-sale homes, both existing and newly constructed, was down to just 1.7 months. Just take it from there and it’s easy to comprehend the current price increase of +17% y/y. It’s also not surprising to hear Glenn Kellman say as he did on CNBC’s Power Lunch that homes have become a luxury good.
Backlog of 3.2M Homes
Tallying up the demand for single-family and multifamily housing needed, REALTORS® determined the current housing market has a backlog of 3.2M homes.
Even if communities all over the country passed up-zoning policies that could mightily increase necessary new construction, this shortage of 3.2M living units wouldn’t just magically disappear. Therefore, NAR is telling buyers to expect ongoing and likely more intense market competition and price increases of approximately +7% in 2021.
Thanks to the National Association of REALTORS®, CNBC and Redfin.
URGENT: 2021 Results Released. New FREE On-Line Web Event Reveals 17 Surprising Secrets Of The Top 100 Millionaire Agents. Get Your FREE Spot For The On-Line Webinar Now. When You Attend This Event You Will Have A Sense Of Relief Knowing You Can FINALLY Laugh At Your Money Worries – If You Follow This Simple Plan. Learn How To Generate 100’s of Motivated Leads Without Coming Off As A Pushy Salesperson and Losing Your Soul. Learn Now How To Become One of the 1000s of Agents Making HUGE Money NOW Who Never Thought They Could.
P.S. Limited Space Available. 235 Spots Left.