Homebuyers are searching for larger houses, as they look for more space to live and work amid the pandemic.
The typical home that sold in the four weeks ending Aug. 16 was 3.7% larger (1,772 square feet) than the typical home that sold a year earlier, according to a report from real estate brokerage firm Redfin. That’s in contrast with the 0.4% average year-over-year growth rate from 2015 to 2019.
Meanwhile, sales were up 21.2% year-over-year nationwide for large homes in July, compared with 10% for medium-sized homes and 2.3% for small homes, the report said, noting homebuyers are also searching for larger homes on Redfin’s website. For its analysis, Redfin said, it divided single-family homes into small (300-1,500 square feet), medium-sized (1,500-3,000 square feet) and large (3,000-5,000 square feet).
“People want bigger: Bigger houses, bigger properties,” Chriss Houghton, a Redfin agent in Vancouver, Washington, was quoted as saying in the report. “That’s what people are asking for, whether their idea of big is a half-acre, one acre or 10 acres. If people are living in a small cookie-cutter home right now, they want a larger house with extra rooms and a dedicated place for an office.”
Buyers are increasingly willing to trade location for space, Los Angeles Redfin agent Amy Black was quoted as saying in the report. “People are realizing it doesn’t make sense to live in the center of Santa Monica in a cramped townhouse when the kids are home and the parents are working from home,” Black said.
According to a Redfin survey in July of more than 1,000 people planning to buy a home within the next 12 months, 21% of homebuyers said the pandemic has caused them to want designated space to work from home and 21% said it has caused them to want more outdoor or recreational space. Additionally, 10% said they now want a bigger home, and 7% said they want a designated space for children to learn from home.
But small and medium-sized homes saw their prices increase slightly more than large homes, Redfin said, attributing that to buyers prioritizing affordability. The price of the typical small home was up 8.1% year over year to $199,900 in July, versus a 7.5% increase to $322,500 for medium-sized homes and a 6.7% increase to $539,000 for large homes.
Redfin chief economist Daryl Fairweather said most people would prefer a large home over a small home given the choice, regardless of what’s happening in the world. “Spending more time at home due to the pandemic is encouraging some homebuyers to seek out bigger houses with bigger yards,” he was quoted as saying. “But affordability still reigns, which is why the market for large homes isn’t much hotter than for smaller homes.”
“The lines are drawn economically. The people with steady work-from-home jobs are able to move away from city centers, or even to entirely different parts of the country, and find more space for a similar price,” he added. “But a lot of people searching for homes are in less advantageous financial situations and can’t afford more space even if they want it.”
Homes of all sizes sold faster than last year in July, with small and medium-sized homes selling faster than large homes, according to Redfin. Fairweather said he still expects sales of large homes to remain strong because builders are responding to the increase in demand for more space.
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August 31, 2020 at 04:18PM
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Sales Increase for Large Homes: 'People Want Bigger' - GlobeSt.com
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