New Redfin (NASDAQ: RDFN) data released this week shows that homebuying demand has increased dramatically and is now 5.5% higher than pre-pandemic levels. Further, new listings have increased weekly over the past month, even though inventory is down 24%.
This points to a supply of housing that can't keep up with demand. Median listing prices are also up 5%, with Redfin reporting that bidding wars are back in some markets.
The V-shaped recovery trend in homebuyer demand seen in Redfin's report can be attributed to historically low interest rates, a robust national housing market, and the slow loosening of pandemic restrictions across the U.S.
Other recent industry data points to healthy home price gains in the first quarter of 2020. Data released from the National Association of Realtors (NAR) shows that median single-family home prices increased year over year in 96% of U.S. metro markets. This is compared to the first quarter of 2019, where 94% of metro markets saw price increases. The NAR report also shows housing prices increased by 7.7% across major metros compared to the first quarter of 2019.
Likewise, ATTOM Data reported this week a similar trend for housing found in opportunity zones. The report states that 45% of opportunity zones saw medium home prices rise by more than the national average (11%) in the first quarter of 2020.
As mobility for renters and buyers continues, what are the key sought-after features worth noting in post-COVID homes? Two things: Better work-from-home spaces and something outside of the city.
In their report, Central Florida Redfin market manager MaryDell Penney stated that "Pre-COVID people wanted a beautiful open floor plan. After a few months in quarantine, buyers want quiet spaces where they can actually get away from everyone else and dedicated space for school and work."
Further, we've seen a spike in rural and small-town real estate as people become frustrated with crowded cities and small spaces.
Of note for investors, Redfin reports that over a quarter of buyers on that platform took their first home tour using video chat. Why make the drive when you can stream the tour from your living room? Look for increased use of technology tools as agents and investors pivot to improve business continuity.