- Homebuyers search for large homes during the pandemic as they look for more space to work.
- But the price for small homes increased more than large homes as home buyers prioritize affordability.
- The search for large homes has been growing annually for almost five years now.
Homebuyers are looking for larger homes than small ones amidst the pandemic. According to a new report from Redfin, typical homes that sold in a month ending August 16 were 3.7% larger (1,772 square feet) than those that got dealt a year earlier.
This is compared with a 0.4% average year-over-year from 2015 to 2019. Sales for large homes increased by 21% year-over-year globally in July. The sales grew almost ten times faster for large homes than small and medium-sized homes. However, medium and small-sized saw a higher price increase.
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The price of small homes was up by 8.1% year-over-year in July, while there was a 7.5% increase for medium-sized homes and a 6.7% price increase for large homes.
Redfin chief economist Daryl Fairweather said:
“Most people would prefer a large home over a small home given the choice. 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 can 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.”
According to the report, in August, the number of searches for large homes by homebuyers and real estate investors went up to 1864 from 1,803 in January. The searches for large homes have been growing annually for almost five years now.
According to Chriss Houghton, a Redfin agent in Vancouver, Washington,
“People want bigger: Bigger houses, bigger properties. 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.”
More price increase in the small and medium-sized homes than large homes
The price for small homes increased by 8.1% year-over-year to $199,900 in July, as against a 7.5% increase to $322,500 for medium-sized homes and a 6.7% increase to $539,000 for larger homes.
More likely, the price increase for small homes was slight because buyers prioritized affordability. It is also essential to know that 17% of homebuyers said the present pandemic made them sought after less expensive homes.
More people plan to buy large homes in the next 12 months than small homes
Homebuyers are willing to trade location for space.
According to Los Angeles Redfin agent Amy Black,
“People are realizing it doesn’t make sense to live in the center of Santa Monica in a cramped townhouse when the kids are home and the parents are working from home.”
More than a thousand people plan to buy a home in the next 12 months; 21% of buyers want larger homes because the pandemic has caused them to idealise bigger spaces designed for work and for their children to learn more from home.