Last week, Hannah Hunt of Allen Tate Real Estate listed a home for $185,000 early in the morning. Before her coffee had a chance to cool, the house was sold. Hannah recalls that when she got out of her first meeting of the day, she already saw an offer in her inbox for well over the listing price and quickly contacted the owners, who sold it for $191,000.
Here’s the crazy part: the buyers had never even toured the house. They put up an offer almost instantaneously. That’s just one of the many startling side effects of the COVID-19 virus: a market of buyers hungry for new homes.
Asheboro’s booming real estate market is a microcosm for a nationwide trend. In a time when people are struggling to pay rent or find jobs, it can seem perplexing how the housing market can be so hot. Pandemic-fueled low interest rates and work from home arrangements can explain the newfound appetite buyers have for picturesque outdoor gardens or Zoom-background-worthy home studies. And maybe for buying houses without touring them as well.
Real estate agents in the Asheboro region have opened up and shared their recent successes with The Courier-Tribune. Here are some trends they have observed:
Buyers are eager to buy, sellers are wary of selling.
Essentially, it boils down to supply and demand. Buyers are flooding the market, but sellers are not putting houses on the market in equal proportions.
Donna Hughes at Top Dog Realty has cited “exponential growth” in buyers. She notes, “A lot of people that I represented last year decided that their home was not big enough now that they were working from home. Or they became financially challenged because their job was cut back, and they wound up needing to downsize. So it was a number of things going on creating a lot of different movements.”
On the other hand, while sellers stand to make a significant profit, they are wary of certain COVID-related risks.
H.R. Gallimore of Re/Max Realty states, “Think about it this way: if you have wanted to sell your home and you’re in the middle of a pandemic, you don’t want people coming to view and look at your home if there’s a chance of being exposed to the virus.”
Gallimore recalls that nearby Guilford County banned in-person tours for a while, so many realtors flocked to less regulated regions like Randolph County, further driving up demand for houses already in short supply.
Additionally, many sellers are concerned about facing the flip side of a “seller’s market” when they themselves have to buy a home after selling off their own. As real estate agent Hannah Hunt put it: “I think that it scares some people just because they don’t know where they’re going to go.”
Homes are getting multiple offers — and better ones.
Offers for homes are not only coming in fast; they are also appearing in droves with competitive terms and conditions. Last fall, Hannah Hunt listed a home worth $255,000. Within 48 hours, Hannah had received 14 offers, 3 of which were cash offers, meaning the buyer was willing to pay the full price upfront. It ended up selling for $260,000 with no repairs, seller concessions, or appraisals.
Similarly, real estate agent Donna Hughes of Top Dog Realty was helping a young man in his 20s sell a three bed, one bath house he bought three years ago. He paid $69,000 at the time and Donna estimated that he could sell it for around $110,000 given the great job he had done with renovating the place. Donna was a bit worried that they were pricing it too high, so she received quite the surprise as the number of interested parties piled up. After an exhausting round of over 70 showings, the house fielded eight offers and sold for $120,000, almost doubling his initial investment.
It’s a seller’s market, said every real estate agent we interviewed. This means that pretty much every seller with a decent home in a decent location is receiving offers, and many of those offers are very appealing.
Lolita Malave of Allen Tate Realty breaks down what makes a compelling offer. First and foremost, there is price. In this market, buyers will almost certainly have to go above listing price, and many are paying the full amount upfront, or at least a big chunk of the down payment.
Another way to sweeten the deal for the seller is a short due diligence period. Due diligence is a period of time when buyers can inspect the property, examining its physical attributes and financial health. For example, buyers can conduct a pest or lead paint inspection to identify any potential health risks or nuisances. Closing the deal quickly is more appealing to sellers, so the turnaround time has become shorter as buyers are eager to put down a good deal.
Homes are on the market for shorter periods of time.
Real estate agents tend to keep a few key metrics in their mental calculator when determining the health of a market. One is called DOM or “Days on Market,” which, as its name suggests, is the number of days a house is on market before it is sold. Given a competitive landscape, the average DOM is expected to go down. In the Piedmont-Triad market, the DOM went from 12 days to just 4 days, according to real estate agent Donna Hughes.
Agents also keep track of inventory levels, measured in the “number of days of supply that we have, based on how long it takes (the average time) to sell the house. Those numbers have been shrinking dramatically,” says H.R. Gallimore of Re/Max Realty.
A recent company report from Allen Tate Realty confirms Gallimore’s claim, revealing that their inventory went from over 6 months to under 2 weeks during the housing boom.
Real estate agent Lolita Malave elaborates, “First quarter active listing inventory was down 20% from last year. At the same time, our closings are up 17%. So, just based on those numbers, we have no houses.” In layman’s terms, there are 20% fewer houses listed this year compared to last year, but the number of houses being sold has gone up 17%. That means there’s very few houses still left on the market, and those houses put onto the market often get snatched up pretty quickly.
To put things in perspective, as of Monday, April 12th, 2021, there are 76 properties for sale in all of Randolph County. In previous years around the same time, Lolita says there were well over a hundred.
The boom comes as a surprise to many real estate agents in the area who expected the pandemic to topple the real estate market.
“In the beginning [of the pandemic], I think we were all a bit afraid,” Hunt remembers, “And then it was like we had a wave. And we’re still riding that wave.”
Donna Hughes notes, “It’s kind of hard to put a positive light on such a negative thing. But I was very grateful because there’s so many people struggling right now. I just counted my blessings with all the people that needed help with real estate.”
Thank you for subscribing to The Courier-Tribune. If you have had any recent experiences with the real estate market you would like to share as a buyer, seller, or renter, please contact Michelle Shen at The Courier-Tribune.
Michelle Shen is an Economic and Data Reporter for The Courier Tribune. Feel free to reach out to her with story tips on Twitter (michelle_shen10), Instagram (pretty_photos_by_michelle OR michelle_shen10), or email (email@example.com).
10:54 am UTC Apr. 14, 2021
10:54 am UTC Apr. 14, 2021