Homebuyers who are juggling work and school from their home want more space, triggering an increase in the number of sales of large homes.
According to Redfin, sales for large homes were up 21.2% year over year nationwide in July, compared to a 10% increase for medium-sized homes and a 2.3% increase for small homes. Redfin categorized large homes as those between 3,000 and 5,000 square feet, medium homes between 1,500 and 3,000 square feet, and small homes between 300 and 1,500 square feet.
And the trend looks likely to continue: The average minimum square footage of Redfin users’ saved searches was 1,864 so far in August, up from 1,794 a year ago.
The average home that sold in the four weeks ending August 16 was 1,772 square fee, 3.7% larger than the typical home sold a year earlier.
Home prices went up 11.3% year over year in July in more rural areas, further proving the desire homebuyers have for more space. In the suburbs, home prices rose 9.2% year over year while in urban areas home prices increased 6.7%.
“Most people would prefer a large home over a small home given the choice,” said Redfin chief economist Daryl Fairweather. “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,” Fairweather said. “The lines are drawn economically. The people with steady work-from-home jobs are able to 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.”
While homes of all sizes that sold faster year over year, Redfin said that small and medium-sized homes sold faster than large ones – small homes went under contract in 28 days, medium-sized homes went under contract in 24 days and larger homes went under contract in 47 days.
Because of increased work-from-home opportunities, 21% of homebuyers said the pandemic has caused them to want designated space to work at home.
Meanwhile, 21% also said the pandemic made them want more outdoor or recreational space, 10% said they want a bigger home and 7% said they want a designated space for their children to learn from home.