Coldwell Banker Real Estate CEO Ryan Gorman told CNBC on Tuesday that homebuyers may have a more wide-open search than ever before — and changes stemming from the coronavirus could be the reason.
“If you’re a consumer looking to buy in this market, you may have the most freedom you’ve ever had to look,” Gorman said on “The Exchange.” “Perhaps because your employer has said you can work remotely or maybe you can come in a bit less frequently.”
As a result of those changes to corporate policy, Gorman said it is possible for prospective homebuyers to look in a slightly different part of their current metropolitan area. For example, instead of looking 30 minutes from the office, a house that is 45 minutes to an hour away could be more attractive if the person only has to commute a few days per week, he said.
“In terms of increasing affordability, that can make a tremendous difference,” he said. “Even in a tight inventory market, it can mean the types of homes you want, you’re able to find much more if you broaden your search territory. Maybe homes that have a space you can convert into a home office or a home classroom.”
Entirely new parts of the United States may also be on the table for people who can permanently work from home, Gorman said. He offered an example of a Coldwell Banker client who is first-time homebuyer currently living in Brooklyn, New York, but searching for places in Minneapolis.
“Their employer had told them they could work fully remotely so they kind of searched the country for where they wanted to be, landed on Minneapolis,” he said. “The entire country was open to them to be able to find that blend of affordability as well as that value they were looking for.”
The affordability component takes on increased significance in a hot housing market that saw sales of newly built homes in July increase nearly 14% compared with the prior month, according to U.S. Census data released Tuesday. For newly built homes sold in July, the median price was $330,600, an increase of 7.2% compared with July of last year.
Sales of existing homes have been surging, too. They rose 24.7% in July from June, according to the National Association of Realtors, which amounts to the strongest monthly gains in the survey’s more than 50-year history.
The median price of a home sold in July was up 8.5% annually to $304,100, as inventories tightened.
Gorman said Coldwell Banker, which is part of Realogy Holdings Corp., is definitely experiencing the impacts of the limited housing inventory.
“A lot of the buyers out there are a little bit frustrated,” Gorman said. But low interest rates, combined with more flexibility in where to look for homes, “is really allowing them to search the market more aggressively than they were before,” he added.
Glenn Kelman, the CEO of real estate brokerage Redfin, told CNBC on Tuesday that the strength in the housing market is geographically dispersed. But it’s particularly robust in more affordable places such as Albuquerque, New Mexico, and Tucson, Arizona, he said on “Closing Bell.”
“It is the century of Texas. It is taking over the U.S. Everyone is moving there, so we’re seeing strong demand, especially in Dallas,” he added. “People are leaving L.A., New York, San Francisco for these very affordable places, and so that’s where the demand has been strongest. But it’s actually pretty strong almost everywhere.”