Room for extended family and pets, home office and internet rise in importance for buyers who realize the need to compromise in today’s competitive market
Life is beginning to return to normal throughout the U.S. with many companies announcing their return to office strategies and cities beginning to open. However, for many 2021 home shoppers who spent the majority of 2020 confined to their homes, the COVID pandemic has influenced what they are looking for in their next house, while the hyper-competitive housing market has them strategizing about how to get ahead, according to a new Realtor.com survey.
The need for more space was the top reason driving home shoppers’ decision to purchase a new home in the coming year, according to the online survey of 1,200 home shoppers conducted this spring by HarrisX. Although most today’s buyers are looking for three bedrooms and two baths, their responses indicate they are looking for more flexibility in their home space and affordability in exchange for a shorter commute — the new realities of a post-COVID world.
“The COVID pandemic ushered in a new way of thinking about what home means, and that is influencing much of what today’s home shoppers are looking for,” said George Ratiu, senior economist, Realtor.com®. “Garages, large backyards and space for pets always rank high on buyers’ wish lists, but those features have grown in importance. The survey results highlight that the pandemic has elevated our relationship with family as well as the need for our home to serve multiple purposes, especially the ability to work remotely. As a result, we are placing a premium on the need to accommodate extended family, and features like a home office and broadband internet.”
What’s in and what’s out for post-COVID home shoppers
When asked which home features to have become a priority as a result of the pandemic, quiet location (28%), updated kitchen (25%), garage and large backyard (24% each) topped the list. Outdoor living area (20%), space for pets (18%), updated bathrooms (19%), home office and broadband internet capabilities (17% each) and open floor plan (16%) rounded out the top 10 pandemic-induced most desired home features.
Sixty-five percent of respondents indicated that they are considering extended family when they shop for a home, with nearly a quarter stating that they are planning to buy near family members. One-fifth of those surveyed said they would have extended family living with them full-time and 30% said their new home would need to accommodate extended family staying with them part-time or visiting.
Consistent with the desire for outdoor space, terms such as “fenced yard,” “acres,” “backyard,” “front porch,” “garage” and “three-car garage” have all seen a significant uptick in searches on Realtor.com® over the past year. With reports of pets being adopted at record rates during the pandemic, the term “pet friendly” also saw a large increase in searches.
Decreasing in importance from prior surveys was the need for a short commute time and a home with smaller square footage. Only 9% indicated a short commute time was a priority and 4% were looking for smaller square footage. This was down from 11% and 8%, respectively, in early March 2020 prior to the pandemic.
Perhaps due to rising home prices, searches for “remodeled” homes on Realtor.com® were down 88% year to date through May. It appears that motivated buyers are making concessions in their home search, with fewer searches for otherwise-popular features such as granite countertops (-58%), theater/media rooms (-65%), and bars (-52%).
Today’s buyer is prepared and willing to compromise
Again, pragmatic about the competitive housing market, 35% of home shoppers said that they were checking listing websites every day and 25% had set a price alert to get notified when new homes hit the market to stay ahead of the competition.
From a financing perspective, 28% indicated that they were planning to offer more than a 20% cash payment, 21% plan to increase their earnest money deposit and 17% plan to either offer above asking price or all cash. While a third said they would not offer above asking price, nearly half were prepared to offer up to 10% above asking.
“In today’s competitive housing market, it is not uncommon to submit an offer above the home’s list price. At the same time, knowing what you can spend and sticking to your budget is one of the most important things a home buyer can do. One way to ensure that you do not go over budget is to limit your search by using price filters to homes under your budget. That way, if you submit an offer that is over the list price, you will still be within your maximum budget,” said Realtor.com® Housing and Lifestyle Expert Lexie Holbert.
When buyers were asked to select which features they would sacrifice if they had to reduce their budget, several COVID-coveted features would be the first to go with man cave and pool/spa tied at 24%, followed by guest house and mother-in-law suite both 23% and new construction at 22%, Rounding out the top 10 features to fall by the wayside were solar panels (21%), finished basement (20%), home office (18%), large backyard and guest room (both 17%).
Methodology: Realtor.com® commissioned HarrisX to conduct a national survey of consumers, including 1,218 adults over the age of 18 who plan to purchase a home within the next 12 months. This survey was conducted online within the United States from March 26 – April 7, 2021. The sampling margin of error of this poll is plus or minus 1.6 percentage points. Results were weighted for age, gender, region, race/ethnicity, and income where necessary to align them with their actual proportions in the population. In addition to the general population, the survey oversampled 1,218 potential buyers with a margin of error of plus or minus 2.8 percentage points.
For more information, visit Realtor.com.