One-third of recent buyers made an offer on a for-sale home without seeing it first, up from 19% last year, according to a recent Redfin survey of 3,350 U.S. residents across 11 metro areas who recently bought or sold a home, attempted to, or plan to do so soon. Forty-one percent of millennials made an offer sight unseen compared to 30% of Gen-Xers and 12% of baby boomers.
Technological advances like interactive 3-D photography and the rapid pace of today’s housing market are two reasons people are more willing to buy homes sight unseen.
Politics is also factor in home buying and selling decisions. Forty-one percent of people said they’d hesitate to move to a place where most residents didn’t share their political views. The same percentage said recent executive orders on immigration affected their buying and selling plans.
People consider a number of factors when buying a home, but for many, the decision comes down to price and availability.
Due to a lack of inventory, when homes do go on the market, many buyers are willing to pay more than the asking price because they know the home will not be available very long. Housing inventory in the U.S. fell 8.9% during Q2 2017 – the ninth-consecutive quarter of decline – and is now 20% lower than 2012, according to Trulia. The number of starter homes fell by 15.6% and the number of trade-up homes fell by 13.1% during Q2.
As a result, houses are being bought at the fastest rate since Trulia started monitoring the trend in 2012. That year, 57% of homes were available two months after they were put on the market. Today, the share is down to 47%.
Prospective buyers, particularly first-timers, are feeling the pinch. The decline in available starter and trade-up homes has forced new buyers to spend 3.1% (for starter) and 1.7% (for move-up) more of their income on housing. Buyers of premium-tier homes need to spend 0.9% more of their earnings on housing.
The trend is forcing buyers to consider not living where they want, but instead where they can find affordable housing. For example, Vancouver, WA, has seen its housing inventory decrease as first-time buyers flock there for its relative affordability and proximity to Portland, OR, which has seen prices rise steadily, according to MarketPlace. Bend, OR-based Pahlisch Homes is building 100 houses there priced between $300,000 and $350,000 – less than the Portland metro region’s median home price of $388,000 in May.