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Scant Housing Supply Results in Lightning-Fast Sales

With the short supply of U.S. homes available, combined with still-record-low rates and sky-high demand, Redfin is reporting that, for 400-plus metro areas during the four-week period ending February 21, a record 43% of homes for sale spent just a week or less on the market. Redfin found that the median home-sale price increased 15% year-over-year to $321,250, as new listings of homes for sale were down 17% from a year earlier. Active listings, the number of homes listed for sale at any point during the period, fell 40% from 2020 to a new all-time low.

“The housing market is now like a Soviet-era supermarket, with most of the shelves empty,” commented Redfin Chief Executive Officer Glenn Kelman during Redfin’s recent Q4 earnings call. “In the week leading up to this call, demand slackened for the first time in months, probably because of cross-country snowstorms. But prior to that, the stories we heard from our agents were harrowing, juicy and bizarre. Migrations are warping the space-time continuum of small-town economies. The affordability crisis that flowed like some huge, unspent electrical charge from San Francisco to Seattle to Portland to Denver and to Boise is now reaching virtually every town in North America, bringing dazzling prosperity, but also new anxieties.”

And with such short supply comes the time for home sellers to capitalize, as the asking prices of newly listed homes hit a new high of $343,961, up 11% from the same time last year.

In a sign that prospective buyers are more eager than ever to close the deal, 55% of the homes that went under contract had an accepted offer within the first two weeks on the market, well above the rate of 44% during the same period in 2020. During the week ending February 21, 57% of homes sold in two weeks or less.

More remarkably, 43% of homes that went under contract had an accepted offer within one week of hitting the market, up from 30% during the same period last year, as 44% sold in one week or less.

Redfin also found that the average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased slightly to 99.4%—1.6 percentage points higher than a year earlier.

Click here for more on Redfin’s study results.

About Author: Eric Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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