According to a new report from Redfin, 45% of people who bought a home in the past year made an offer on a property that they had not seen in person – the highest share since at least 2015, and up from just 28% during the same period last year.
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 home-buying season, the majority of homebuyers will have made a sight-unseen offer,” he says. “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 doing so, 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 are touring in person due to the coronavirus, while 18% are not touring in person at all, according to another recent Redfin survey.
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, click here.
