Thirty-three percent of people in the U.S. who bought a home in the last year said they had made an offer on a home without first seeing it in person, up from 19% 2016 and 21% in 2015, according to real estate broker Redfin.
In a survey Redfin released Wednesday, 41% of millennials reported making a sight-unseen bid, compared with 30% of Gen Xers and 12% of baby boomers.
SurveyGizmo fielded the study in May, using the its audience platform to reach 3,350 people from the general population in 11 major metropolitan areas who said they had bought or sold a home in the past year, tried to do so or planned to do so this year.
The metro areas were Baltimore, Boston, Chicago, Dallas-Fort Worth, Denver, Los Angeles, Portland, San Diego, San Francisco, Seattle and Washington.
Redfin ascribed the prevalence of this year’s sight-unseen bids largely to the speed of today’s highly competitive housing market. It said the typical home sold in May went under contract in 37 days, the fastest pace on record since at least 2010, when Redfin began keeping track.
Technology also has a lot to do with this behavior, according to Rachel Musiker, Redfin’s senior communications manager who writes about the national housing market.
In an email message, she pointed to the Denver market as an example, where the typical home that sold in May went under contract in just six days.
“Especially in places like Denver, Redfin agents say that a lot of their clients are moving there from other parts of the country, and can’t necessarily fly in every weekend to house hunt.”
Prospective buyers also look at abundant information and photos available online about homes for sale and conditions in a community for living, working and raising a family. As well, they may ask family or friends in the area to check out a home on their behalf.
Musiker pointed out that the survey asked whether respondents had made an offer sight unseen, not whether they had closed on the purchase without seeing the home in person.
“Buyers who offer sight unseen typically make it to the inspection in person or go see the home at some other point while the home is in the escrow/closing process when they might still have opportunities to get out of the contract if they decide not to move forward with the home.”
Still, she said, some Redfin clients — most often investors or foreign buyers, but also some busy people moving across the country — have bought homes without seeing them until after closing.
Affordable housing was the chief economic concern of survey respondents who bought or tried to buy in the last year, cited by 40% of the sample. Thirty-eight percent selected the income gap between wealthy and poor people, and 27% said the federal budget deficit.
Forty-one percent of buyers in the survey said they would hesitate to move to a place where people had different political views from their own. Millennials were likelier than their elders to express such qualms, with 46% saying they had some or significant hesitation, compared with 29% of boomers.
According to the survey, orders restricting immigration influenced the buying and selling plans of 52% percent of respondents who identified themselves as East Asian-American, South Asian-American, Arab-American or Latino.
These included 9% who indefinitely canceled their buying plans, 16% who stepped back from buying a home, 20% who were selling because of the uncertainty and 10% who said they were less likely to sell because of the orders’ effects on buyers.
Thirteen percent of these respondents said they were likelier to buy, believing the restrictions would improve their job prospects and the economy in their area.
In the May survey, 45% of minority respondents who bought or tried to buy a home in the last year said they felt that sellers or their agents were less eager to work with them because of their ethnicity or race, down from 49% in Redfin’s December survey.
The portion of self-identified white respondents who thought they may have been discriminated against was largely unchanged between December and May, at 28% and 29%.
Redfin said an expected rise in mortgage rates following on the Federal Reserve’s June 14 benchmark interest rate hike was unlikely to get much of a reaction in the markets. Just 5% of survey respondents said they would cancel their home buying plans if rates rose above 5%.
Fifty-one percent of buyers (excluding all those who worked with a Redfin agent) reported that they had received savings from their agent in the form of a commission refund, a closing-cost contribution or another type of savings, up from 46% a year ago.
In addition, 46% of all (non-Redfin) sellers successfully negotiated their listing agent’s commission to a lower price in May, up from 39% a year ago.
Both millennial buyers and millennial sellers were more likely than their older counterparts to save on real estate fees, according to the survey.
“Millennials are already starting to set trends in the real estate industry,” Redfin chief economist Nela Richardson said in a statement. “They are three times more likely than baby boomers to make an offer sight unseen, and they’re more likely than older buyers and sellers to negotiate commission savings.
“Despite their tech-savvy confidence, politics are seeping into illennials’ decisions about where to live; nearly half cited hesitations about moving to a place where their neighbors wouldn’t share their views.”