In the three months ending in February, it took the typical homebuyer 73 days to close on their new home after their first home tour, down from 76 days last year and from a peak of 84 days in winter 2016. This is according to a new analysis of home touring and offer activity among thousands of people who bought homes with Redfin agents nationwide over the past five years.
With more homes on the market, prices growing at a slower rate and even falling in some markets, and less competition from other buyers, finding a home is a lot less stressful this year than it has been in recent years. When a buyer finds the home they want to make an offer on there’s now a greater chance that their offer will be the only one and that the seller will accept it. This has led to the shortest median home search length for buyers during the winter months in at least six years.
As the market is becoming more tenable for buyers, it’s becoming less favorable for sellers, who are waiting longer to secure a buyer this year. Nationwide, homes that sold in February spent a median 59 days on the market before going under contract, up two days from a year earlier, and following three consecutive years of acceleration.
“This year, there are more homes for sale relative to the number of buyers, so a buyer is more likely to have their first offer accepted, while sellers are having to wait longer for their home to be sold,” said Redfin chief economist Daryl Fairweather. “It’s like a 1950s-era school dance with more boys than girls — the girls can quickly find a dancing partner, but more boys are waiting around with no one to dance with.”
Philadelphia (28 days faster), Houston (17 days) and Washington, D.C., (14 days) saw the biggest year-over-year drops in the number of days buyers spent on the market looking for a home.
At the other end of the spectrum, Miami (17 days longer) and New York (13 days) saw the biggest jumps in days buyers spent looking for homes. Most of the metro areas where buyers spent more time on the market this year than last year were on the East Coast, while buyers in cooling West Coast markets were able to find homes more quickly.
“Buyers this year are more prepared from the start of the process,” said D.C. area Redfin agent David Ehrenberg. “Typically, when I meet a buyer to start to visit homes in person and strategize how to win the right home for the right price, she has already been browsing homes for sale online for months, and is now ready to focus on a narrow band of neighborhoods or buildings. They’re only touring things that they think have a strong chance of liking and being able to afford. My buyers have an idea from their friends of what it takes to win a competitive offer, so they’re more inclined to work with lenders that will give them a competitive edge, and include strong terms in their first offer, compared to buyers in years past.“
Buyers this year are also having to see fewer homes in person and write fewer offers before successfully landing a home. Nationally, buyers toured an average of about 10 homes this winter before closing on a home, and made an average of 1.6 offers, compared to touring about 11 homes and making 1.8 offers a year ago.
“The housing market isn’t as daunting for first-time homebuyers,” added Fairweather. “If you put in a fair offer, there is a good chance that offer will be accepted. Also, because mortgage interest rates are lower than they’ve been in over a year, homebuying is more affordable, especially in expensive places like San Francisco and San Jose where home prices have fallen.”
Homebuyers in Atlanta saw the biggest decrease in the number of homes toured before closing on their home. Buyers there toured an average of 12.2 homes in winter before finding a home, down from 18.8 homes a year earlier. Buyers in Phoenix also saw a big reduction, touring an average of 12.4 homes this winter compared to 16.3 last winter.
