September 24, 2020By: Scholastica (Gay) Cororaton
Buyer competition is heating up. In the latest August REALTORS© Confidence Index Survey, REALTORS® reported that, on average, properties for which the sale closed in August received about 3 offers, up from 2 offers one year ago and in March when the pandemic hit.
REALTORS® also reported that on average, they took nearly 5 clients per month on a home tour, a recovery from the slump in April when buyer agents took out only 2.4 clients during the month. Meanwhile, on average, REALTORS® reported that on average, they listed 1.8 properties during August, or just 40% of the number of clients taken on a home tour.
Another statistic from the August survey that buyer competition is heating up: the REALTORS® Buyer Traffic Index rose to 76 while the REALTORS® Seller Traffic Index was at 45. A value above 50 means stronger buyer or seller traffic compared to one year ago.1 All states reported stable to very strong traffic except in North Dakota and Illinois. North Dakota’s housing market is still impacted by weak oil prices: oil prices (West Texas Intermediate) have recovered to $43/barrel but are still below the average of $57/barrel in 2019.
With demand outpacing supply, properties sold faster, with half of properties sold in 22 days during July and August, and 69% of listings staying on the market for less than one month (listing date to contract date). With intense competition, buyers have to be better prepared to make an offer, including already getting prequalified by a lender.
The best market signal of the intense competition is price. In August, the median price of existing homes rose to $310,600, an 11.4% year-over-year gain, with over 10% price appreciation across all major regions: Northeast (10.4%), Midwest (10.7%), South (12.3%), and West (11.8%).