Home sellers asking more as demand for housing soars

With housing inventories at record lows, home sellers are asking more for their properties.

Median home sale listing prices in August grew by 10% nationally in August — the largest such increase in 15 years according to Realtor.com

While housing activity typically begins to cool in late summer and fall, there’s no sign of a slowdown in the fast-paced homebuying market that’s fueled by record low mortgage rates.

“It’s difficult to imagine that the housing market will be able to sustain the frenzied demand we are currently experiencing, but we have yet to see any signs of slowing,” Realtor.com chief economist Danielle Hale said in the new report. “Buyer traffic on Realtor.com is outpacing the record levels we saw earlier this year, suggesting that demand will continue to exceed the number of available homes for sale.

“Although demand is much more intense than it normally is this late into a buying season, the typical home asking price has likely peaked for the year at $350,000,” she said. “However, given the strong demand, sellers will remain in the driver’s seat for the foreseeable future.”

On the national level, the biggest increases in home asking prices in August were in northeast and Midwestern markets, including Philadelphia (up 18.6%), Cincinnati (up 17.8%) and Boston (up 14.7%).

Miami was the only major U.S. market that saw a slight decline in home asking prices.

For renters, the market is in their favor. Apartment landlords are ramping up the freebies to attract tenants during the pandemic.

The share of rental units offering concessions to tenants has almost doubled since early this year as COVID-19 has swept the country, according to a new study by Zillow.

More than 30% of nationwide rentals are offering some kind of concessions.

“Before the pandemic, rent growth was accelerating and the nation was seeing concessions dwindle,” Zillow economist Joshua Clark said in the report. “That trend reversed sharply after the pandemic hit in February.

“In a softer rental market, landlords are trying to push the right button to bring renters into their space.”

Zillow looked at both apartments and single-family home rentals for its market overview.

Nationwide 63% of apartment renters report getting concessions, compared with only 35% of single-family renters.

The most popular giveaways include free months or weeks of rent, waived or reduced deposits, gift cards and free parking.

Zillow said the median amount of free rent offered to tenants is six weeks — the equivalent of more than an 11% annual discount.

Zillow analysts warn that the spike in recent concessions could signal a future wave of outright rent cuts.”Concessions can often be a leading indicator of a coming price drop in that landlords will often offer them first, before reducing rent,” Clark said. “If owners feel concessions are no longer moving the needle, they’ll reduce prices.

“Many landlords prefer to offer a concession rather than cut rent and set a precedent that could linger when the market picks back up.”

U.S. markets with the biggest share of rent concessions as of July included Washington, D.C. (57.5%), Charlotte (53.0%) and Austin (47.1%).

The cities where landlords are offering the fewest rent freebies include Oklahoma City (6.2%) and Providence, R.I. (12.8%).

from Boston Herald https://ift.tt/3buLGdc