Home buyers are looking for bigger homes as they seek more space to live and work in amid the pandemic.
The typical home that sold in the four weeks leading up to August 16 was 3.7% larger (1,772 square feet) than the typical home that was sold a year earlier, according to a report from real estate agency Redfin. This is in contrast to the average growth rate of 0.4% over the previous year from 2015 to 2019.
Meanwhile, sales for large homes nationwide in July rose 21.2% year over year, compared with 10% for medium homes and 2.3% for small homes. According to the report, homebuyers are also searching for larger homes on the Redfin website. For its analysis, Redfin said it divided single-family homes into small (300-1,500 square feet), medium (1,500-3,000 square feet), and large (3,000-5,000 square feet).
"People want bigger: bigger houses, bigger lots," Chriss Houghton, a Redfin agent in Vancouver, Washington, was quoted in the report. "That's what people ask if their idea of big is half an acre, one acre, or 10 acres. If people are living in a small house with cookie cutters right now, they want a bigger house with extra rooms and a special place for an office. "
Buyers are increasingly willing to trade location for space, Los Angeles Redfin agent Amy Black was quoted in the report. "People are realizing that there is no point in living in a cramped townhouse in downtown Santa Monica when the kids are home and the parents are working from home," said Black.
According to a Redfin survey in July of more than 1,000 people planning to buy a home within the next 12 months, 21% of shoppers said the pandemic resulted in them having designated space to work from home desire, and 21% said they wanted to have more outdoor or recreational space. Additionally, 10% said they want a bigger home now, and 7% would like a designated space for children to study from home.
However, prices rose a bit more for small and medium-sized homes than for large homes, Redfin said, attributing this to buyers who prioritized affordability. The price of a typical small home rose 8.1% year over year to $ 199,900 in July, down from a 7.5% increase to $ 322,500 for medium homes and a 6.7% increase to $ 539,000 for large homes .
Redfin chief economist Daryl Fairweather said most people would prefer a big house to a small house given a choice, regardless of what happens in the world. "Because of the pandemic, spending more time at home is encouraging some home buyers to look for larger homes with bigger yards," he was quoted as saying. "But there is still affordability, so the market for large houses is not much hotter than for smaller houses."
“The lines are drawn economically. Those with permanent jobs from home can move away from city centers or even to completely different parts of the country and find more space for a similar price, ”he added. "But many people looking for homes find themselves in a less favorable financial position and cannot afford more space even if they want to."
Homes of all sizes sold faster in July than last July, with small and medium-sized homes selling faster than large homes, according to Redfin. Fairweather said he continues to expect strong large home sales as home builders respond to increasing demand for more space.