You’d expect demand for new homes to shrink dramatically during a pandemic. But with sellers also staying on the sidelines and homes being trickier to list in a public-health crisis, the market is now giving rise to an unlikely phenomenon: bidding wars.
“Since the pandemic began, demand fell off a cliff,” Taylor Marr, an economist at Redfin, told Bloomberg. “What most people overlook is that sellers also pulled back.”
About 40 percent of homebuyers across several markets found themselves bidding against other buyers on properties, with markets such as San Francisco and Boston seeing even fiercer competition, the publication reported, citing data from Redfin.
The number of active listings shrank by almost a quarter in April, compared to the same time last year, according to the report. Existing home sales are also expected to drop 20 percent month over month in April, according to Bloomberg.
“I’m encouraging my sellers to put their property back on the market,” Sally Forster Jones, a broker in Los Angeles with Compass, told the publication. “The fact that there’s limited inventory is to their advantage right now.” She noted that two of her clients bid on homes priced at $800,000 and just under $1.5 million, and both properties received more than 30 offers and are in contract above ask.
Mark Zandi, chief economist at Moody’s Analytics, predicted that home prices would eventually succumb to the economic shock wrought by the pandemic. Zandi estimated that up to 2 million homeowners could lose their homes. [Bloomberg] — TRD Staff