Home buying demand eclipses pre-COVID-19 levels

Home COVID-19 Home buying demand eclipses pre-COVID-19 levels

A Redfin survey found that demand for home buying has increased even though inventory remains low.

By Ken Ryan

There are some bright spots on the housing front that might bode well for the flooring industry at large.

A newly released report from Redfin, a real estate brokerage firm, shows home-buying demand has increased dramatically, and is now 5.5% higher than pre-pandemic levels. Furthermore, new listings have increased weekly over the past month, even though inventory is down 24%.

According to Redfin, these numbers point to a supply of housing that can’t keep pace 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 strong national housing market and the loosening of pandemic restrictions across the U.S.

“The sellers who are venturing back into the market now either need to sell…or they’re worried prices might fall in the future and want to get out while the getting is good,” said Hazel Shakur, a Redfin agent in Maryland.

Flooring retailers encouraged by housing data

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 loosening of pandemic restrictions.

Some flooring dealers say they are already seeing rising activity in their markets, and are ready to seize these opportunities. In Naperville, Ill., Lauren Voit, owner of Great Western Flooring, has noticed a very depleted inventory of existing homes, with many builder allowance requests coming through for future projects. “Many of our new construction homes are tear downs of existing homes due to limited land availability in our area,” Voit told FCNews. “Also, quite a few of the projects that are coming in right now are for flooring updates to existing homes before a buyer moves in.”

Voit said she expects to see a steady market in her area, given the fact Naperville is the second-largest economy in the state of Illinois and also ranked one of the safest places to live and best places to raise a family. “As people move out of the city—which we are expecting many will do after being cooped up in their condos in Chicago during COVID—I see our surrounding area as attracting many new homeowners,” she added.

In San Antonio, Billy Mahone III, manager of Atlas Floors Carpet One Floor & Home, said that while he has not had a lot of recent home buyers contacting his store for new flooring, “We have had several customers looking to spruce up their flooring in order to put their house on the market.”

Many homeowners are fixing up their homes now, whether or not they intend to move, figuring these investments are always beneficial in the long run. “We have seen an increase in traffic and sales over the last four weeks vs. the comparable 2019 period as many consumers want to replace flooring while staying home,” said Carlton Billingsley, co-owner, Floors and More, Benton, Ark. “Thankfully, we have been able to respond quickly and take care of their project as many of these consumers want it complete and want it now. Being able to serve them and install quickly has allowed us to capture additional sales while they’re investing in their homes.”

Market sees resurgence of bidding wars   

The rise in home buying interest vs. low inventory has brought bidding wars back into the spotlight, according to Redfin. “My client was in a 24-offer bidding war for a 1960s home that grandma had never updated,” said David Hokenson, a Redfin agent in Seattle. “It was listed for $360K; we bid $400K and didn’t even come close.”

What homebuyers are looking for today

This past week, more than one in four Redfin buyers took their first home tour via video chat. Shellie Silva, a Redfin agent in Grand Rapids, Mich., said buyers from Chicago seeking lower prices skip the three-hour drive around Lake Michigan and just stream the home showings from their sofas.

What buyers are looking for post-pandemic might not be what they were looking for before, according to Redfin. “Pre-COVID, people wanted a beautiful, open floor plan,” said MaryDell Penney, Redfin market manager in Central Florida. “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.”

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