House hunters out in force in usually slow holiday time

In normal years, many people take a step back from the real estate market as fall sets in, then jump back in after the new year begins. In 2021, with mortgage rates still low and the economic and lifestyle impacts of the pandemic still influencing consumer behavior, buyers continue to be out in full force.

Two reports from the Redfin real estate brokerage show that investor activity reached an all-time high during the third quarter of 2021 and that buyer demand also recently reached a record high.

Redfin's Homebuyer Demand Index reached its highest level during the four-week period that ended Nov. 14. This was the peak demand in the index since at least 2017, when the brokerage began tracking requests for house tours and other home-buying services.

Buyers who were unable to find a place to purchase in the spring are coming back this fall in the hope that more homes will be available, according to Redfin's chief economist, Daryl Fairweather.

At the same time, active listings, which refer to all homes on the market and not just new listings, were down 22% during the four-week period that ended Nov. 14 compared with the same period in 2020, and down 41% compared with that same period in 2019.

Prices were up, too. Redfin's data shows that the median sales price of $357,881 in November represented a 13% increase from November 2020 and a 30% increase from November 2019.

Despite higher prices, homes continued to sell quickly. According to Redfin, 45% of homes sold within two weeks of being listed, and 32% sold within one week during the four-week period that ended Nov. 14. Both of those numbers were well above 2020 and 2019 figures.

A contributing factor to the lack of homes for sale and the rising prices is the increased appetite among investors for houses. Rather than buy and flip the properties to new buyers, more investors today are keeping the homes for rental income, according to Redfin. Rental demand has been rising in recent years among would-be buyers who cannot find a place to buy or cannot afford homes in their preferred location.

A record 18.2% of all home purchases were made by investors during the third quarter of 2021, according to a new report by Redfin. That was up from 16.1% during the second quarter of 2021 and up 11.2% from the third quarter of 2020.

The number of homes purchased by investors -- 90,215 -- during the third quarter represents an 80.2% increase in the number of investor-purchased homes during the third quarter of 2020. Most investors - 76.8% - purchase homes with cash, which makes it difficult for traditional buyers to compete. Investors primarily purchased single-family houses, which made up 74.4% of all investor purchases, compared with 16.9% condos and co-ops, 5.4% townhouses, and 3.4% apartments or duplexes.

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