The coronavirus pandemic caused an historic drop in the supply of homes for sale that was already pretty meager. New listings had dropped by half during the second weak of April, compared with a year ago, according to Redfin, a real estate brokerage. Weak supply and growing demand is now causing a surge in bidding wars, especially for homes priced below $1 million.
"Demand for homes has picked back up after hitting rock bottom in April, and that uptick paired with a lack of supply is a recipe for bidding wars," said Redfin lead economist Taylor Marr. "Homebuyers are getting back out there, searching for more space as they realize using their home as an office and school may become the norm."
"There's more buyer activity on our site, as defined by engagement with our agents around homes that they're looking at, than there are new listings coming on our site, as defined by new listing inventory in the market," said Robert Refkin, CEO of Compass, a real estate brokerage, in an interview on CNBC's Squawk Alley.
"While new listings are still declining on a yearly basis, last week's jump shows some sellers are ready for a summer home sale — a positive sign for the market," said Danielle Hale, chief economist for realor.com. "But despite this uptick, time on market continues to increase and there's a long road ahead to getting back to last year's pace of new sellers."
They want to get rid of their money as long they can.