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Homebuyer Demand Picks Up in September

rowofhomesBoth home tours and signed offers rose in September, marking a turnaround after a drop in new listings held back August activity.

Real estate brokerage Redfin reported a 2.2 percent monthly increase in customers requesting tours with the company's agents last month, about half the improvement recorded this time last year.

"Though the September uptick in tour requests was not as strong as last year, this late season pickup suggests that housing activity will hold steady through November before the seasonal slowdown in home searches over the holiday," said Redfin Chief Economist Nela Richardson.

At the same time, 6.8 percent more customers signed offers on houses than in August. While that increase was down from 12.5 percent last year, fewer of those offers faced competition from other shoppers (47.4 percent compared to 57.9 percent in September 2013).

"Buyers have a much better chance of getting a home, and more leverage to get a better deal," said Mia Simon, a Redfin agent in Palo Alto, California. "In the spring, we were seeing multiple offers (typically six to 10 offers) on each home, which makes it very hard to predict a final sales price, because wildcard offers tend to be thrown in. Now, there are quite a few homes that receive just one to two offers, which allows us to have a better gauge of the final sales price, and also be a little softer on terms such as an appraisal contingency."

With historical data suggesting a correlation between signed offers and home sales 30–45 days in the future, Redfin predicts an increase in sales in October and November in most markets.

The latest numbers reinforce recent forecasts from the company predicting the housing market is poised to see its strongest fall season in five years.

"After a rough start to the year, lower competition and continued low mortgage rates encouraged homebuyers to restart their search after Labor Day and boosted late-season demand," Richardson said. "We expect that the lift in demand will carry over to next year and position the housing market for a strong start to the 2015 home-buying season."

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
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