Working From Home
Other buyers are looking for more room, now that they’re working from home indefinitely.
Katie Watson, 25, is a project coordinator for a biopharmaceutical testing facility in a suburb of Kansas City, Missouri. When her job went remote this year because of the virus, she had an extra incentive to buy. She closed last week on a three-bedroom home in Blue Springs, Missouri, for $200,000.
As a first-time buyer in a market that hasn’t historically been that competitive, Watson was surprised that she had to put in an offer in less than a day and bid $15,000 above the listing price.
“I just assumed if you offered the asking price, that’s what it took to buy a house,” she said. “But that’s not what happened.”
The rapid-fire bidding is taking place against the backdrop of extremely tight inventory. While listings pile up in expensive urban areas like Manhattan and San Francisco, the reverse is true for suburban areas outside big cities and in much of the rest of the nation.
Boise Boom
Across the U.S., the number of available homes was down 38% from a year earlier in the week ended Oct. 17, according to Realtor.com. In Boise, Idaho, which had been booming even before the pandemic, inventory was down 71%.
Tracy Kasper, a longtime real estate agent in the area, said there has been a flood of demand from people relocating to Boise and telecommuting. Buyers are waiving contingencies that allow them to get out of a contract if a house is appraised for less than their offer price or if inspections uncover the need for repairs.
A market that’s balanced between buyers and sellers would have about six months of supply, according to Kasper. “For the last six months or so, we’ve had two weeks,” she said. “It’s just been gangbusters.”
Whether the boom continues through the colder months -- when buyers tend to get distracted by the holidays -- remains to be seen, said Chris Glynn, a senior economist at Zillow. However, he said, the inventory crunch is real.
“We’re still at that peak market activity,” Glynn said. The question is, “will it slow down into the fall and the winter, or has there been some fundamental change?”
This article was provided by Bloomberg News.