By KIMBERLEY HAAS
As people throughout the country wish for a white Christmas this upcoming weekend, it is expected that home sales will stay warm in many parts of the nation throughout the winter.
Continued bidding wars, the Great Resignation, and Millennials on the market will all likely contribute to keeping home prices high during a season where sales typically cool off until spring.
And above-average temperatures expected in many parts of the United States may also keep buyers on the market at a time when they would typically try to avoid moving due to snow and ice.
Redfin reported on Friday that in November, 59.5% of home offers written by their agents faced competition, which is the lowest level in 11 months but slightly up compared to the 57.3% competition rate in November of 2020.
At the peak in April, Redfin agents faced a 74.6% competition rate, according to the report.
The top three cities for bidding wars were Richmond, VA, at 80%, Salt Lake City at 73.8%, and San Diego at 72%. Honolulu followed at 71.1% and Dallas made the top five at 70.6%.
“Bidding wars are still happening, but buyers are starting to get more breathing room,” said Jill Thompson, a Redfin agent in Indianapolis.
That may be good news for buyers, who have resorted to writing love letters to try and secure a home. The problem has gotten so serious, that the state of Oregon is banning the practice.
The Great Resignation’s Impact On The Market
As potential homebuyers flock large cities to resettle in smaller communities throughout the country so they can work remotely and enjoy a higher quality of life, it is impacting the market in more rural areas because those individuals typically make higher salaries than offered in the local area.
A report published in November by Realtor.com highlights the top 10 cities job seekers are flocking to.
Using data from LinkedIn, which has information on more than 180 million members in the United States, the migration rate was calculated to create the list Realtor.com published.
Cities making the list were Austin, Texas; Sarasota, Florida; Myrtle Beach, South Carolina; Asheville, North Carolina; Nashville, Tennessee; Boise, Idaho; Huntsville, Alabama; Denver, Colorado; Portland, Maine; and Phoenix, Arizona.
Lenders should also note that employees between the ages of 30 and 45 have had the greatest increase in resignation rates, increasing more than 20 percent from 2020 to 2021.
This is a key demographic for those who offer mortgages because people in that age range typically want a stable home for their spouses and children.
Millennials Want In On The Real Estate Game Regardless Of Their Family Status
Lenders should also keep in mind that even Millennials who do not have children and are not married are getting into the homebuying game. The pre-pandemic trend of buying homes with friends has grown exponentially since March of 2020.
Danielle Hale, a Chief Economist for Realtor.com said in a recent article for Forbes that home sales are expected to increase another 6.6% and home prices to rise another 2.9% on top of 2021 highs.
“Demand from [Millennial] households will keep the market competitive and fast-paced despite a small uptick in housing inventory as builders continue to ramp up production, increasing single-family starts by 5% in 2022,” Hale is quoted as saying by Senior Contributor Brenda Richardson.
Scientists Predict A Warmer Than Average Winter In Much Of The Country
When it is cold and icy, people typically are not as interested in moving, but this winter will be favorable for those in the mortgage industry.
Officials at the National Oceanic and Atmospheric Administration held their monthly climate briefing on Thursday. According to the three-month forecast they included in their presentation, the seasonal temperature outlook will be leaning to above average in much of the east.
The Seacoast of the Northeast and a large part of Texas through Florida will likely be warmer than average.
In the Northwest and parts of Alaska, the seasonal temperature outlook prediction is that it will be colder than normal.
Much of the South will experience below-average precipitation levels, according to the forecast.
Follow Editor Kimberley Haas on Twitter @KimberleyHaas.