Nearly Half of Homebuyers Made an Offer Sight-Unseen, the Highest Share on Record
Friday, July 31st, 2020
Almost half (45%) of people who bought a home in the past year made an offer on a property that they hadn't seen in person, the highest share since at least 2015, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. That's up from just 28% during the same period last year, and 20% in July 2015, when Redfin posed this question for the first time. Redfin agents cite health concerns around the pandemic, accelerating migration trends, and competition fueled by a worsening housing shortage as reasons more buyers are bidding on homes before visiting them.
Sight-unseen offers will likely continue to climb in the coming months, according to Redfin chief economist Daryl Fairweather. "I predict that by the end of the 2020 homebuying season, the majority of homebuyers will have made a sight-unseen offer," said Fairweather. "The pandemic has changed the way many people view homes, and on top of that, the market is highly competitive. If you aren't using this strategy, another buyer who is could beat you to the punch."
Many Americans who were already considering relocating before the coronavirus pandemic are now taking the plunge, as mortgage rates continue to fall and employers implement flexible remote-work policies. A record 27% of house hunters looked to move to different metro area in the second quarter of 2020, up from 25% in the second quarter of 2019.
Additionally, about a quarter of people who plan to buy a home in the next year are limiting the number of properties they're touring in person due to the coronavirus, while 18% aren't touring in person at all, according to another recent Redfin survey. Buying a home remotely has become easier as touring technology has improved. Views of virtual 3D walkthroughs on Redfin.com have surged 243% since late February, and video tours led by Redfin agents now account for 1 in 10 of all Redfin home showings, up from less than 1% at the beginning of March.
"A big part of doing video tours is establishing trust between me and my clients," said Cleveland Redfin agent Danielle Parent. "Because the buyers aren't physically present, I have to be their eyes, ears, and nose, for that matter. When I'm walking through a home on a video tour, I'm pointing out cracks in the walls, places where moisture can get in, and other important things they need to know. I earn that trust."
Intensifying competition is also contributing to the uptick in sight-unseen offers. More than half of Redfin offers faced bidding wars in June as the number of homes for sale continued to shrink and mortgage rates dropped to a record low, making it all the more advantageous for house hunters to get their offers in ASAP—sometimes before seeing the home in person.
To view the full report, including methodology, please visit: https://www.redfin.com/blog/buying-house-sight-unseen-increases