ReCap

August

U.S. now has over one million ADUs

Across the country, accessory dwelling units (ADUs)—also referred to as in-law suites, garage apartments, or guest quarters—are on the rise, especially in high-cost areas.1 Check out the numbers from a recent Freddie Mac study:

  • From 2000 to 2019, the percentage of for-sale listings containing ADUs increased from 1.6% to 6.8%.
  • The passing of ordinances to reduce restrictive zoning laws have ADUs sprouting up mostly in the south and west regions. California, Florida, Texas, and Georgia account for half of the nation’s 1.4 million ADUs.
  • Detached ADUs (garden suites or guest cottages) are more prevalent in western cities with large lots. Attached ADUs (finished basements or spaces above attached garages) can be found in older, denser cities along the east coast.

The Freddie Mac study also stated that ADUs are helping to fill the gaps in long-term affordable rentals. It will be interesting to see if ADUs continue to impact the housing market in the years ahead.

1“Granny flats, garage apartments, in-law suites: Identifying accessory dwelling units from real estate listing descriptions using text mining,” Freddie Mac, last updated July 16, 2020.

August

Home inspections are being waived at record rates

Inventory is down and bidding wars are up. To make their offers more competitive, buyers are making some unique decisions.1 Here’s more from a Redfin analysis:

  • Of the successful offers submitted by Redfin agents in June in select major U.S. markets, 19.9% waived the home inspection contingency. This compares to 13.2% in June 2019.
  • Winning offers waived the appraisal contingency at a rate of 20.6%—up from 17.4% one year earlier. As a result, those buyers must come up with cash to account for any differences between a low appraisal and the offer price.
  • When these contingencies are waived, agents are seeing lower bids accepted over higher ones, as sellers are opting for the surer deal.

While these unorthodox strategies may often work, clients are still encouraged to use the protections offered by home inspections and appraisals. Please check in with me if you’d like more information.

1Lily Katz, “20% of winning home offers waived the inspection contingency in June, up from 13% last year,” Redfin, last updated July 28, 2020.

August

Prices going up with demand

As the housing market continues to rebound, sellers are setting their prices high. And in response, buyers’ offers are meeting these lofty expectations. Here’s more from Redfin1:

  • Listing prices in the four-week period ending July 12 were up 13% from last year. Meanwhile, closed sale prices jumped 6%.
  • Pending home sales increased 7%. However, demand continued to outpace supply, as inventory dropped 28%.
  • Sale-to-list price ratios rose to an average of 98.8%. Meanwhile, the median asking price of a home for sale was $328,500.

I am here to keep you updated on the state of the market as we transition from summer into fall. Let me know if you need assistance.

1Tim Ellis, “Home sellers’ asking prices up 13% from last year as demand keeps soaring,” Redfin, last updated July 23, 2020.

August

Northeast has the most ‘actively engaged’ buyers

For northeast homebuyers, simply planning to purchase isn’t enough. More than any other region, buyers here are actively engaged in the process to find a home.1 The numbers from the National Association of Home Builders®:

  • Across regions, prospective buyers in the northeast are the most likely to be “actively engaged” in the purchase process (57%)—compared to 44% in the midwest, 45% in the west, and 50% in the south.
  • Among the generations, Millennials (57%) outpaced Generation X (47%), Generation Z (40%), and Baby Boomers (37%) in their percentage of active buyers.
  • House hunters are, however, taking longer to find a home. In the second quarter, 59% of buyers looked for longer than three months, up four percentage points from last year.

If you or your customers have any questions about the home financing process while they look for the right home, I’d be more than happy to help.

1Rose Quint, “Low mortgage rates convert prospective buyers into active buyers,” Eye on Housing Blog, last updated July 29, 2020.

July

Single-family searches soaring

The search for privacy has officially begun. Single-family homes away from densely populated areas are gaining in popularity among Boston-area shoppers.1 Check it out:

  • Of the saved searches by Redfin.com users in May, there was a six-percentage point increase in searches for single-family homes in the Boston metro area since February.
  • Nationally, 36% of Redfin’s saved searches were aimed at single-family homes. That’s up 33% since February.
  • Meanwhile, searches for townhouses, condos, and multi-family homes declined. In May, just 7.5% of saved searches excluded single-family homes, the lowest level in three years.

Sharing the latest market data with you is one of my priorities. Please contact me if you’d like more information.

1Lily Katz, “Interest in single-family homes hits four-year high,” Redfin, last updated June 15, 2020.