Want to Buy Your First Home? Get Ready to Tour 15 Houses and Make at Least 5 Offers
Over the course of the pandemic, you’ve probably been caught up in a cycle of "doomscrolling." Have you also obsessively refreshed real estate listings in hopes of finding the perfect home — or any home, really — in this hot housing market? You wouldn’t be the only one.
A new report from Opendoor, a residential real estate platform for buyers and sellers, underscores the lengths first-time homebuyers have been going to find a house. The company commissioned a nationally representative survey of 1,000 first-time homebuyers, and, spoiler alert: They’re putting in tons of time and energy.
“Buying and selling real estate is very, very difficult,” Kerry Melcher, Opendoor's head of real estate, told Money — particularly for first-time buyers, and especially so during the pandemic.
The company's First-Time Homebuyer report, which released Oct. 28, shows that 52% of first-time buyers checked real estate listings once or more per day. And of those who did check daily, they did so seven times per day on average. Call it the real estate refresh.
What it takes first-timers to buy a home today
The homebuying hustle doesn’t stop after refreshing Zillow a bunch of times. Finding a worthwhile listing is merely the first of many steps, which are likely to be laden with disappointment for first-timers.
Next comes the logistics of viewing the homes. The average first-time buyer toured 15 properties — virtually or in-person — and 33% of respondents toured 20 or more, according to the report.
Rejection shouldn't only be expected, it's all but guaranteed. Almost every first-time homebuyer that Opendoor surveyed said they lost out on a property that they were interested in before finally finding their current one — 98% overall, and 99% for millennials.
For 56% of respondents, it took them five or more offers for one to be accepted. For more than a quarter of first-time buyers, it took 10 or more offers to buy a home.
"With so many offers being submitted, it’s becoming more and more difficult to win a dream home," the report stated.
Opendoor's Melcher said the first-time buying process can be "extremely taxing," specifically when offers are rejected over and over again. She explained that buyers can develop deep feelings and even fall in love with homes on the market. When things don't pan out as buyers hope, it can be heartbreaking.
“It’s a lot of effort — and very much emotional effort," she said. "An emotional tax."
Why is buying a home still so difficult?
The housing market, frequently described as red hot for most of 2021, is showing signs of cooling off but is not yet back to normal — and may not be for quite some time.
According to the National Association of Realtors (NAR), existing home sales dipped in August by 2% but jumped up 7% in September month over month, seasonally adjusted. Mortgage rates are starting to creep higher but are still historically low compared to pre-pandemic levels, so buying is still appealing for many.
Labor shortages in the construction industry paired with materials shortages also affect the amount of homes on the market. That, in turn, means higher home prices and a more competitive market. These issues factored in to real estate site Zillow's recent decision to halt purchasing homes.
The current housing market is especially tough on first-time homebuyers. NAR data show that they are a shrinking portion of overall homebuyers, and they are losing out to cash offers.
“First-time buyers continue to struggle competing with cash buyers,” NAR’s latest Realtors Confidence Index reports.
Ivy Zelman, CEO of housing research firm Zelman & Associates, told Grow, a publication by CNBC and Acorns, that aspiring homebuyers should probably hold off and ride out the seller’s market. But for how long?
“I would say over the next 12 to 18 months, we are going to start to see the market starting to show more moderation and more cooling, and you will be more likely to be in a more balanced buyer’s market,” she told Grow.
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