Demand Shows Signs of Resilience

8 Nov

by  | November 7, 2013

Home tours and offers slowed during shutdown but surged after reopening with offers up 8 percent compared to a 4 percent drop last year

Each month, Redfin captures homebuyer demand by tracking the number of home tours requested and offers made by its customers across the country. Overall, Redfin’s demand data in October suggests that the U.S. government shutdown did impact buyer behavior, but only temporarily. The drop in demand during the shutdown had us worried, but it turns out that buyers quickly resumed their house hunt immediately after. All-in-all, home-buyer demand in October was actually more robust than expected, especially considering the normal seasonal decline.

September 29 – November 2
vs. Five Weeks Prior
2012 2013
Redfin Customers Requesting Tours -3.0% 0.1%
Redfin Customers Making Offers -3.8% 7.8%

Here’s what we saw across the 22 markets that Redfin serves:

  • Redfin customers scheduling home tours increased 0.1% month over month in October 2013, compared to a drop of 3% during the same period in 2012.
  • Offers signed by Redfin customers were up 7.8% month over month in October 2013, in stark contrast to the 3.8% drop during the same period last year.
  • During the government shutdown, tours and offers both declined, with tours down 2.8% and offers down 8.4% in the two-week period starting on October 6. Both metrics rebounded the week after the government reopened, rising 3.4% and 2.4%, respectively.

Shifting market conditions for buyers probably are helping to sustain late-season demand. As we said last month, competition is dropping steadily, which is helping to boost buyers’ negotiating power. Redfin Seattle agent Kathryn Rion has seen a rise in buyers who want to capitalize on this change. “Many buyers want to find a home before year-end because they are worried that competition will pick up again in the spring,” according to Kathryn. Moreover, mortgage rates have fallen steadily since mid-September, which may be easing affordability concerns.

Demand is unlikely to remain steady in November, however. As Thanksgiving approaches, demand will drop off as buyers shift their focus toward holiday preparations.

October 2013 Tour Requesters

October 2013 Offer Signers

 

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