Market Begins to Cool; Natural Disasters Spawn Moves

A roundup of news and information from around the web about real estate, personal finance, and the economy.

Housing Market Shows Signs of Seasonal Cooling Even as Historic Demand Continues

The housing market is showing signs of seasonal cooling after a scorching hot summer sales season that stretched uncharacteristically far into fall, according to Zillow’s Weekly Market Report. A nearly six-month acceleration of year-over-year list price increases stabilized this week at 11.7% above 2019. Buyers are quickly buying up what few homes are left on the market, with sales continuing to be dragged down somewhat by increasingly short inventory.

Buyer demand continues to push beyond seasonal norms

Newly pending sales are up 19.3% since this time in 2019, but slowed 1.5% since last week in the latest installment of a seven-week downward seasonal trend. In the first week of September, newly pending sales were up 23.8% year over year.
A lack of new inventory and seasonal slowing appear to finally be tempering record sales figures, but weekly pending figures are now similar to those from last April and July—both of which are traditionally strong sales periods.
Houses are on the market for a median of 12 days before an offer is accepted, which is unchanged from the past two weeks. This is 17 days faster than last year—another effect of strong demand pushing this year’s home shopping season past its usual endpoint.

Read the rest of the report here.

Survey: Over a Quarter of Americans Want to Live Somewhere Else Due to Recent Natural Disasters

More than a quarter (27%) of Americans said that recent natural disasters such as fires, floods, and storms have made them want to move away from where they currently live or have changed where they want to move, according to a new report from Redfin. These findings are based on an October Redfin survey of more than 3,000 U.S. residents.

Meanwhile, half of Americans said that recent natural disasters have had no impact on their feelings about where they live, and almost a quarter (23%) said that such events have made them like where they live more.

Wildfires have ravaged the U.S. this year, burning millions of acres across California, Oregon, Washington, and Colorado. Six of the 20 largest wildfires in California history have taken place in 2020 alone, and two of the state’s ongoing blazes—the Silverado Fire and the Blue Ridge Fire—put nearly 100,000 Southern California residents under emergency evacuation orders. The U.S. has also experienced 27 named storms this year, just one away from the annual record set in 2005. The latest to hit was Hurricane Zeta, which made landfall in Louisiana on Wednesday, leaving several people dead and more than 2.1 million without power.

“Climate change still doesn’t feel like an immediate threat to a lot of people, but as more folks come face to face with wildfires, hurricanes, and floods, we’ll see an increase in the number of Americans who consider moving due to natural disasters,” said Redfin chief economist Daryl Fairweather. “Climate change could also become a bigger factor in the home buying process if insurance companies stop offering coverage in catastrophe-prone areas.”

Learn more here.

High Demand and Low Inventory Continue Streak of High Residential Showing Traffic in Cities and Metropolitan Areas of US

ShowingTime found that showing traffic remained strong in large metropolitan areas, with Seattle, Denver, Washington, D.C., Salt Lake City, Boston, and Baltimore recording high numbers of home showings during the month of September according to the company’s Showing Index. With low inventory and sustained buyer demand, traffic jumped 64.1% year-over-year nationwide.

“All but one of the top 20 markets with the heaviest buyer traffic recorded double-digit showings per listing in September, well above the current U.S. average of six showings per listing,” said Michael Lane, President of ShowingTime. “That number more than doubled in several markets from the same time last year, despite the pandemic.”

Meanwhile, some communities along the beleaguered Gulf Coast—hit hard by Hurricane Laura at the end of August and Hurricane Delta in early October—experienced year-over-year declines in showings. Nevertheless, Louisiana is tracking ahead of 2019 figures for showing activity in what has proven to be a resilient real estate market.

“In September, we saw a normal seasonal slowdown of about 8% from August,” said ShowingTime Chief Analytics Officer Daniil Cherkasskiy. “Due to much lower levels of available inventory, however, showing activity is still significantly above last year’s values, a situation that is likely to persist through next May.”

Find out more here.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.