The pandemic has actually inspired fewer homes to be on the market, causing a shortage of homes. But there are several trends emerging with home sellers because of the pandemic.
1. Looking to upsize: Homes have felt smaller in the pandemic. Home sellers who sold their home after March were more likely to report the main reason for selling was because their home felt too small (18% compared to 13% of those who sold prior to the pandemic). Downsizing has become less popular. Even sellers over the age of 55—who tend to be the most likely to cite a desire to downsize—have shrunk their house footprint by only 100 square feet, the report shows.
A lot of the reason for feeling a home is too small is the need for a home office or needing to have additional family members live in the home.
2. Feeling urgency: Sellers are more likely to say they feel at least somewhat a sense of urgency to sell their home. Sellers who sold after March were more likely to say they were somewhat urgent in their need to sell their home—46% compared to 39% of those who sold before April. Prior to the pandemic, 47% of sellers said they did not need to sell urgently and could wait for the right offer, compared to 40% of those selling during the pandemic.
3. Technology becomes more necessary: More contactless methods grew in importance as homes were listed since the pandemic began. I have used a lot more technology in marketing the homes for my clients. I am now using video, 3D home tours and virtual open houses. Video usage nationwide has grown from 12% to now 18%.
4. Incentives haven’t disappeared: Despite high buyer demand, sellers entering the market after March also used incentives to help attract buyers. Thirty-eight percent of sellers who sold after March used incentives, compared to 31% of sellers who sold prior to the pandemic. The incentives that have increased in use since the pandemic began have been credit toward remodeling or repairs and home warranty policies.
5. Equity gains: Home prices have risen since the pandemic, a boon to sellers. Home sellers who sold since the pandemic began sold their home for a median of $300,000; those who sold prior to the pandemic sold for a median of $270,700. Nearly one-quarter of sellers who sold after March sold their home for $500,000 or more. The median dollar amount that sellers have gained since the pandemic is $80,000 in equity compared to $64,000 prior to the pandemic.
A lot of the equity gains are because of low mortgage rates and a shortage of homes listed for sale.
6. Long-timers appear more motivated to move: Home tenure among sellers in the survey was 11 years, the same as before the start of the pandemic. However, 40% of sellers who sold after March had owned their home for 16 years or more, compared to 34% of sellers who sold before April.
7. Desire to live close to family remains strong: For the second consecutive year, home sellers say a primary motivator to move is so they can live closer to friends and family. That trend continues to be common in the pandemic, although now it's among home sellers who are planning to move farther away. Home sellers who are moving closer, within city limits or nearby, tend to be relocating out of a desire to move into a larger home.
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