The National Association of Realtors has released a years’ worth of research on how the housing market has changed — and the answer is a lot.
Aside from skyrocketing prices, stiff competition among potential buyers and a record speed at which homes are selling, the COVID-19 pandemic has also changed the reasons for why people are moving.
“It is really, really interesting. Historically, what it has been is a change in your family situation: You have a baby, you get married, you get divorced (or) your children leave the nest … but right now what we are seeing is people moving to be close to friends and family. That’s a new one,” said Jessica Lautz, vice president of demographics and behavioral insights at NAR.
Another shift has been how long homeowners stay put, referred to as homeowner tenure.
“I think that tenure is super interesting this year, it has upended the trends that we have seen. It is the biggest decline we have seen in the history of the data set, (with average tenure) down to eight years,” Lautz said.
A year ago, homeowner tenure averaged 10 years.
Even though tenure is declining, new buyers move in with the intention of staying for longer, according to an NAR survey. In general, buyers said they expected to live in their homes for a median of 12 years, while 18% said they were never moving.
“Possibly not. But I do think that once you’re in your brand new home, you are probably in love with it, and the transaction right now is a little arduous,” Lautz said.
While much attention has been given to affordability and potential buyers being priced out of the housing market over the last year, it has been a good time to be a seller.
NAR notes that home prices have reached record highs, paving the way for sellers to get maximum profits on their sale, typically 100% of list price, but 35% of sales in the past year have been more than original list price. Sellers report selling their homes for a median of $85,000 more than they bought it for.
Few sellers priced right sit on the market for long. NAR data shows the time on market has dropped to the shortest on record, of just a week.
Because of quickly selling homes, largely from a lack of inventory, potential buyers often make offers on multiple homes before finally having an offer accepted. It now takes buyers an average of eight weeks from the start of their search to signing a contract to buy.