Single Family Home Sales Slower than ‘One Might Expect’

Remote work, the desire for privacy, and all-time-low mortgage rates make single-family homes more desirable during the coronavirus pandemic, according to a report from Redfin.com. "But condos could make a comeback if single-family home prices continue to surge," their experts said.

Single-family home prices experienced a rise from 11.9% to $343,000 year-over-year. The rise in price for condos bounced just 5,4% to a median of $266,000, creating the biggest gap between condo and house prices since 2014.

“Home prices have been growing across all property types, as record-low mortgage rates have suddenly equipped Americans with more buying power. But condos have experienced relatively modest price growth because the coronavirus pandemic has motivated many homebuyers to instead bid on single-family homes, which typically offer more space and privacy,” said Redfin Lead Economist Taylor Marr. “But if prices of single-family homes continue to surge to unsustainable levels, condos may make a comeback, as they could become the only type of home that buyers in some areas can afford while also avoiding intense bidding wars.”

Interest in single-family homes has already started to decline slightly; about a third (34%) of saved searches created by Redfin.com users filtered exclusively for single-family homes in September, down from a peak of 37% in July, indicating that living in a single-family home is becoming less of a priority for house hunters.

Redfin stats show interest in single-family homes has already started to decline slightly. "About a third (34%) of saved searches created by Redfin.com users filtered exclusively for single-family homes in September, down from a peak of 37% in July, indicating that living in a single-family home is becoming less of a priority for house hunters."

While single-family home sales have been outpaced by condo sales, that could be due to inventory issues, Marr said.

"One might expect to see stronger home sales in the single-family market given robust homebuyer demand, but the supply shortage has put a lid on how far single-family home sales can grow," according to Marr.

The entire report comparing single family and condo sales can be accessed here.