Homebuyer Buzz: Buyers Eye Out-of-Town Markets and Second Homes
November 30, 2020
Homebuyer Buzz is our monthly round-up of news stories related to the latest in homebuying trends — from the evolving wants of homebuyers to design news and more.
Homebuyers are still looking to out-of-town markets as remote work has opened new possibilities. At the same time, demand for second homes is skyrocketing and real estate insiders are reporting that neighbors, good and bad, have become an important factor for buyers. And, amazingly, despite the pandemic, homebuyers are contributing more to down payments than they have since at least 2000.
Nearly one-third of homebuyers are looking to move out of town. That’s at least according to Redfin users in the third quarter of 2020. Top out-of-town destinations for homebuyers included Santa Barbara, California, where the net inflow was up 124 percent from 2019. Other hot spots included Louisville, Kentucky, and Buffalo, New York. Louisville had a 113 percent increase in inflow, while Buffalo had a 107 percent increase. The cities losing residents? Major markets like New York City, San Francisco and Los Angeles. [HousingWire]
Buyers are valuing good neighbors these days. Real estate agents are reporting that neighbors have become more important to homebuyers since the pandemic started. With more people working at home, it makes sense — from noise levels to opportunities for safe socialization. It even played out during the election, where yard signs in support of one candidate could turn off buyers from an area. [Realtor.com]
The 2020 Profile of Home Buyers and Sellers is here. The National Association of Realtors’ 2020 Profile of Home Buyers and Sellers came out last week. While the full report is about $20, you can see some highlights at the link. Here’s a sample: 31 percent of all homebuyers were first-timers, down from 2019. Meanwhile, the typical buyer was 47 years old and the median household income rose to $96,500. [NAR]
The State of the Nation’s Housing 2020 report is also out. The Joint Center for Housing Studies of Harvard University recently released their latest research on housing in the U.S. The 44-page report indicates that upheavals this year have had their fair share of impact even while historically low interest rates and growth in some sectors has bolstered homebuying and the overall economy. [JCHS]
Modsy’s latest trend report suggests comfort is key. The 2021 Trend Report by Modsy, an online interior design service, suggests people are pining for comfortable furniture with a traditional touch, in addition to earthy materials and lighter-colored wood. Modsy designers are also expecting to see more color in homes next year, which is supported by the colors of the year as promoted by popular paint companies. [Insider]
Antibacterial materials also vying for popularity. Houzz has some predictions for additional home design trends in 2021, including antibacterial materials and appliances that promote better hygiene. Bricks could also see a return to add a measure of warmth to the home. Not surprisingly, adaptable layouts are also predicted to be big so people can make the most out of their space. [Better Homes & Gardens]
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New homes are in the South and the West. Researchers at Porch analyzed which cities have the highest percentage of new homes (defined as being built after 2000). In the small and mid-sized category, Surprise, Arizona, Meridian, Idaho, and League City, Texas, topped the list. In large cities, Raleigh, North Carolina, Austin, Texas, and Fort Worth, Texas, topped the list. One commonality between most of the cities is that they have higher percentages of single-family and larger homes. [Fox 26 Medford]
Homebuyer activity rebounds after election week. Realtor.com’s Housing Market Recovery Index increased 2.7 points in the week following the election after some deceleration leading up to it. The housing demand component of the index, which tracks online search activity, grew 13.5 points while the housing supply component, which tracks growth in new listings, also rebounded. Expected analyses this week will indicate if there was a typical pre-Thanksgiving rush to close deals. [Realtor.com]
Demand for second homes increases 100 percent over last year. Redfin is reporting that demand for second homes was up 100 percent in October 2020. Redfin’s lead economist Taylor Marr suggested it’s because affluent Americans are able to work remotely as kids can also attend school remotely. It’s possible that some of these second homes will turn into primary homes after buyers close the deal. [World Property Journal]
Homebuyers are contributing higher down payments. According to a report from Attom Data Solutions, homebuyers are putting up the biggest down payments in more than two decades. In the third quarter, the median down payment was $20,775 — the highest since at least 2000. That represents a 69 percent increase from 2019 when the median payment was $12,325. [Arkansas Democrat Gazette]