In the first in a new monthly series, Bright MLS, the second-largest MLS in the country, released a pre-spring survey of its subscribers last week, finding at least some preliminary evidence that buyer demand picked up ahead of an uncertain spring season.
This first analysis comes at a key moment, as brokers and agents wait for the traditional busy season for real estate, unsure whether a recent shake-up in the banking industry or if still volatile mortgage rates will depress housing activity. While the survey only covered subscribers in Bright’s mid-Atlantic regional footprint last month, a few surprising finds could potentially bode well for the whole country.
“We’re currently still wrapping our hands around it,” says Dr. Lisa Sturtevant, chief economist for Bright.
Bright has made a concerted push over the past several months to leverage its deep well of real estate data and derive new and up-to-date insights into the market. The only MLS with an on-staff economist in Sturtevant, this new survey series hopes to track trends and build a database that can be used to follow and predict larger market movements.
“It could be that people were taking quick action in February,” says Sturtevant. “But was this an opportunistic month, or is this part of a bigger pattern that yeah, inventory is tight and buyers are out there still competing? My guess is that it is going to be competitive into the spring.”
From a pure number standpoint, the data looks starkly different from what was observed at the national level going back to winter or even fall. More than two-thirds of buyers (68%) had to make multiple offers in order to get a home, and first-time buyers surged to 41%.
At the same time, buyers were not having to search for the extended time periods seen in many regions in 2021, with 44% looking for two months or less.
Sturtevant says she doesn’t expect the kind of bidding wars that characterized the pandemic-era markets, but it is still “surprisingly competitive” compared to last fall, when interest rates were roughly at the same level as today.
“I’ve been hearing anecdotally that brokers and agents are working with people where there are multiple offers coming in, and there are bidding wars, but this is the first time we’ve sort of seen that systematically,” she says. “This survey covers six states plus Washington D.C…we’re seeing that across the mid-Atlantic.”
Sturtevant says that looking at the demographics, particularly of sellers, provides some more encouraging news. An unexpectedly large number of sellers moving further distances, and older sellers moving to be closer to family or into retirement homes means that some more fundamental trends continue to be favorable for real estate activity.
“When you look at who the sellers are, it’s going to be more and more important to pay attention to who is selling,” she says. “I think this moving out of state isn’t a continuation from the pandemic, but rather, just a shift in the characteristics of who is selling right now.”
Retirements, moving to assisted living or the death of the owner accounted for a whopping 21% of sellers. Sturtevant has previously spoken about how the choices of older Americans—specifically the baby boomer generation—will shape housing markets for years to come.
The number of first-time buyers tracked far above what national surveys found last year, as that cohort hit an all-time low in 2022. Sturtevant says she is leaning toward calling this “a blip” rather than signs of a deeper shift. First-time buyers likely jumped in during a slight mortgage rate dip in February, but Sturtevant says she is looking for at least another month’s data before drawing any further conclusions.
Another potentially interesting tidbit—rental or investment properties made up one out of every 10 sales in the survey. Sturtevant says that is higher than expected, but again, more data will reveal whether this indicates a deeper movement in real estate.
“I wonder if it’s some people who are maybe trying to time the market,” Sturtevant says. “Who knows what it’s going to look like in six months?”
Maybe the most exciting insights from the survey are yet to come. Using Bright’s granular details on properties, Sturtevant says she will eventually be able to track what kinds of properties are attractive to what kinds of buyers, which amenities are helping homes get multiple offers, or what financing options are being used.
“We’re going to ask some more forward-looking questions because it’s a whole different ball game sometimes from month to month,” Sturtevant says. “I think there’s going to be a lot of fun stuff we’ll be able to talk about as we do more surveys.”
