But Price Increases for Small Homes Were Higher in July than for Large Homes, as Buyers Chase Affordability

Seattle, WA – Aug. 27, 2020 (PRNewswire) (NASDAQ: RDFN) — The typical home that sold in the four weeks ending August 16 was 3.7% larger (1,772 square feet) than the typical home that sold a year earlier. Compare that with 0.4%, the average year-over-year growth rate from 2015 to 2019, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. Even though sales of large homes were up 21% year over year nationwide in July—sales grew nearly 10 times faster for large homes than small homes—small and medium-sized homes saw the bigger price increases. The price of the typical small home was up 8.1% year over year in July, versus a 7.5% increase for medium-sized homes and a 6.7% increase for large homes. 

“Most people would prefer a large home over a small home given the choice,” said Redfin chief economist Daryl Fairweather. “That’s true regardless of what’s happening in the world, although spending more time at home due to the pandemic is encouraging some homebuyers to seek out bigger houses with bigger yards. 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. 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.”

The average minimum square footage of Redfin.com users’ saved searches was 1,864 so far in August, up from 1,794 a year ago and up from 1,803 in January. The size of sought-out homes has been growing over the past five years, up from 1,685 in January 2016. 

“People want bigger: Bigger houses, bigger properties,” said Vancouver, WA Redfin agent Chriss Houghton. “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.”

Redfin analyzed July housing market data to determine whether homebuyer interest in additional space has translated to a hotter housing market for bigger homes. The answer? Yes—but only slightly. 

Sales grew nearly 10 times faster for large homes than small homes
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. For this analysis, Redfin divided single-family homes across the country into three size tiers: Small (300-1,500 square feet), medium-sized (1,500-3,000 square feet) and large (3,000-5,000 square feet). 

The increase in pending sales for large homes was nearly double that of medium-sized homes, with an even bigger gap for small homes 
The story is similar for homes that went under contract in July, with large homes experiencing a 16.1% year-over-year increase in pending sales, compared with 9% for medium-sized homes and 2.6% for small homes. 

The coronavirus outbreak has caused homebuyers to want larger homes, with 21% of homebuyers saying the pandemic has caused them to want designated space to work from home and 21% saying it has caused them to want more outdoor or recreational space, according to a Redfin survey of more than 1,000 people who are planning to buy a home within the next 12 months from July 19-21. Additionally, 10% said they now want a bigger home, and 7% said they want a designated space for children to learn from home. 

Prices jumped more for rural areas (up 11.3% year over year in July) and suburbs (9.2%) than urban areas (6.7%), which points to a preference for more space. The median square footage of homes that have found a buyer in rural areas and suburbs is about 1,850, versus about 1,500 in urban areas. 

But small and medium-sized homes saw their prices increase slightly more than large homes 
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. The bigger price increase for smaller homes is likely due to buyers prioritizing affordability. Seventeen percent of homebuyers said the pandemic has caused them to want a less expensive home, according to the aforementioned survey. 

The typical small home sold 19 days faster than the typical large home
Homes of all sizes sold faster than last year in July, with small and medium-sized homes selling faster than large homes. The typical small home went under contract in 28 days (2 fewer days than last year), versus 34 days (-2) for medium-sized homes and 47 days (-3) for large homes. Just under 39% of small homes went under contract within two weeks (up from 28.9% last year), compared with 34.1% of medium-sized homes (up from 22.8%) and 24.1% of large homes (up from 14.3%). It’s typical for more expensive homes to take longer to sell. 

New listings increased nearly 8% for large homes, and declined for smaller homes
New listings of large homes were up 7.6% year over year, while they were down 8.3% for small homes and down 1% for medium-sized homes. Total home supply was down about 25% from last year in July for each category. A lack of new listings has contributed to dwindling supply among small and medium-sized homes. But while there has been an increase in new listings of large homes, they are being snatched off the market in greater numbers, which is why total inventory is down about the same amount for all three categories. 

The uptick in new listings of large homes could be partly due to owners of larger, more expensive homes realizing they have the potential to earn a significant amount of money by selling their home.  

“Owners of single-family homes are recognizing it’s a good time to capitalize on demand from people who want more room, both inside and outside, to accommodate all the new things they’re doing at home,” said Seattle Redfin agent Jessie Culbert Boucher. “Some people have been in their large family homes for decades, they’ve been thinking about selling and see that now is a good time. Others—and these are definitely not the ones who have lost their jobs during the pandemic—are putting their big houses on the market and taking advantage of low mortgage rates to upgrade into even larger, even nicer homes.”

National housing market summary by home size, July 2020 (Single-family homes only)
300-1,500 square feet	1,500-3,000 square feet	3,000-5,000 square feet
Median sale price	$199,900	$322,500	$539,000
Median sale price, YoY	8.1%	7.5%	6.7%
Homes sold, YoY	2.3%	10%	21.2%
Pending sales, YoY	2.6%	9%	16.1%
Home supply, YoY	-25%	-24.3%	-24.4%
New listings, YoY	-8.3%	-1%	7.6%
Off market in two weeks	38.8%	34.1%	24.1%
Off market in two weeks, YoY, percentage-point change	+9.9 pts.	+11.3 pts.	+9.8 pts.
Median days on market	28	34	47
Median days on market, YoY	-2	-2	-3

To read the full report, complete with national and metro-level analysis, please visit:https://www.redfin.com/blog/buyers-seek-large-homes-pandemic

About Redfin 
Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer’s favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country’s #1 real estate brokerage search site, offering a host of online tools to consumers, including the Redfin Estimate. We represent people buying and selling homes in over 90 markets in the United States and Canada. Since our launch in 2006, we have saved our customers over $800 million and we’ve helped them buy or sell more than 235,000 homes worth more than $115 billion.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email press@redfin.com. To view Redfin’s press center, click here.

SOURCE Redfin

The coronavirus pandemic is exacerbating the trend of moving from expensive coastal areas like San Francisco and New York to affordable inland places like Sacramento, Phoenix and Las Vegas

Seattle, WA – Aug. 28, 2020 (PRNewswire) (NASDAQ: RDFN) — 27.8% of all Redfin.com users looked to move to another metro area in July 2020, up from 27.4% in the second quarter and 25.2% in July 2019, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage.

The work-from-home culture stemming from the coronavirus pandemic is exacerbating the trend of migration away from expensive coastal cities to more affordable inland areas that has been going on for at least five years.

“People who can work remotely are re-examining where they want to live, and for most of them that means they’re looking at places that are less expensive,” said Veronica Clyatt, a Redfin agent in Pleasanton, CA, located about 40 miles east of San Francisco. “I’ve had buyers drop out of their search in the Bay Area because they’re moving to Sacramento or Texas, and I’ve had people moving over to Pleasanton because it’s less expensive than San Francisco. Everyone wants a bigger house and a bigger yard, and they want to pay less. A lot of people moving away from the Bay Area have had it in the pipeline for awhile, and remote work is accelerating the process.”

The latest migration analysis is based on a sample of more than 1.5 million Redfin.com users who searched for homes across 87 metro areas in the second quarter of 2020, excluding searches unlikely to precede an actual relocation or home purchase. To be included in this dataset, a Redfin.com user must have viewed at least 10 homes in a particular metro area, and homes in that area must make up at least 80% of the user’s searches.

Sacramento, Phoenix and Las Vegas Are Still the Most Popular Destinations
Sacramento has overtaken Phoenix as the most popular destination for homebuyers looking to move to a different metro area. Sacramento, Phoenix and Las Vegas—all places with a median home price of under $475,000—are perennial hotspots for migrants. Austin and Atlanta round out the top five in terms of net inflow, as they did in the second quarter. A net inflow means more people are looking to move in than leave, and a net outflow means more people are looking to leave than move in.

“It’s a feeding frenzy in Las Vegas right now, with low inventory and tons of interested buyers. We’re seeing mass migration of people from other states moving into Nevada,” said Las Vegas Redfin agent Marco Di Pasqualucci. “The lack of state income tax, warm climate and the relatively low cost of housing—you can buy a nice home for around $300,000—make Las Vegas an attractive place for people looking to move away from expensive areas.”

Portland, OR was one of the 10 most popular destinations in July after dropping off the list in the second quarter, with nearly 20% of Redfin.com searches coming from buyers outside the metro area, up from 17% last year. San Francisco is the number one origin for buyers searching in Portland.

“There have been a lot more people moving from San Francisco to Portland,” said Portland Redfin agent Nicole Arnold. “Most of them are working from home at tech jobs, and they’re realizing they need and want more space. A house in Portland is about half the price as one in San Francisco. Buyers are selling their Bay Area homes and cashing out their equity to move here, where they’re able to live a different lifestyle in a larger home.”

Top 10 Metros by Net Inflow of Users and Their Top Origins
Rank	Metro*	Net Inflow†	Net Inflow LY	Portion of Searches from Users Outside the Metro (July 2020)	Portion of Searches from Users Outside the Metro (July 2019)	Top Origin	Top Out-of- State Origin
1	Sacramento, CA	8,070	4,497	50.6%	44.5%	San Francisco, CA	Reno, NV
2	Phoenix, AZ	4,997	4,137	35.1%	34.0%	Los Angeles, CA	Los Angeles, CA
3	Las Vegas, NV	4,739	3,715	49.0%	46.7%	Los Angeles, CA	Los Angeles, CA
4	Austin, TX	4,617	3,001	36.7%	33.5%	San Francisco, CA	San Francisco, CA
5	Atlanta, GA	4,207	3,537	25.8%	27.0%	New York, NY	New York, NY
6	Dallas, TX	3,586	2,155	28.9%	24.6%	Los Angeles, CA	Los Angeles, CA
7	Tampa, FL	2,794	2,011	55.9%	55.2%	Orlando, FL	New York, NY
8	Nashville, TN	2,466	1,253	36.8%	29.3%	New York, NY	New York, NY
9	Portland, OR	2,245	1,590	19.7%	17.1%	San Francisco, CA	San Francisco, CA
10	Charlotte, NC	2,234	1,628	39.7%	40.4%	New York, NY	New York, NY
*Combined statistical areas with at least 500 users in July 2020†Negative values indicate a net outflow; among the one million users sampled for this analysis only

People are looking to leave New York, San Francisco and Los Angeles
The top five places with the biggest net outflow in July—New York, San Francisco, Los Angeles, Washington, DC and Chicago—are the same as they were in the second quarter. Expensive coastal areas typically see the highest share of people looking to leave.

Indianapolis, where roughly 36% of local Redfin.com users looked for homes outside their home metro in July, is on the list of places with the biggest net outflow for the first time since Redfin started tracking migration. The most popular destination for people leaving Indianapolis is Chicago, though Chicago is also one of the places home searchers are looking to leave.

“Many of the sellers I work with are relocating to a different state,” said Indianapolis Redfin agent Andrea Ratcliff. “The most common reason is a new job that requires a move to a different area, and some sellers are retired couples who own two homes and have decided to sell their primary residence in Indianapolis and move full time to their vacation home.”

Top 10 Metros by Net Outflow of Users and Their Top Destinations
Rank	Metro*	Net Outflow†	Net Outflow LY	Portion of Local Users Searching Elsewhere (July 2020)	Portion of Local Users Searching Elsewhere (July 2019)	Top Destination	Top Out-of- State Destination
1	New York, NY	26,584	21,692	34.2%	39.8%	Boston, MA	Boston, MA
2	San Francisco, CA	26,247	17,052	23.9%	21.1%	Sacramento, CA	Seattle, WA
3	Los Angeles, CA	12,405	10,226	16.3%	16.4%	San Diego, CA	Las Vegas, NV
4	Washington, DC	8,298	5,396	13.3%	12.0%	Salisbury, MD	Salisbury, MD
5	Chicago, IL	4,415	3,073	11.7%	10.8%	South Bend, IN	South Bend, IN
6	Denver, CO	3,805	1,981	27.1%	23.7%	Seattle, WA	Seattle, WA
7	Seattle, WA	3,612	1,184	14.2%	11.7%	Los Angeles, CA	Los Angeles, CA
8	Milwaukee, WI	1,337	674	37.9%	39.5%	Minneapolis, MN	Minneapolis, MN
9	Indianapolis, IN	791	331	35.9%	30.1%	Chicago, IL	Chicago, IL
10	Detroit, MI	632	209	22.4%	21.1%	Chicago, IL	Chicago, IL
*Combined statistical areas with at least 500 users in July 2020†Among the one million users sampled for this analysis only

To read the full report, please visit: https://www.redfin.com/blog/july-2020-housing-migration-trends.

About Redfin
Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer’s favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country’s #1 real estate brokerage search site, offering a host of online tools to consumers, including theRedfin Estimate. We represent people buying and selling homes in over 90 markets in the United States and Canada. Since our launch in 2006, we have saved our customers over $800 million and we’ve helped them buy or sell more than 235,000 homes worth more than $115 billion.

For more information or to contact a local Redfin real estate agent, visitwww.redfin.com. To learn about housing market trends and download data, visit theRedfin Data Center. To be added to Redfin’s press release distribution list, email press@redfin.com. To view Redfin’s press center,click here.

SOURCE Redfin