More people are buying homes without ever physically seeing them: Study

Yahoo Finance’s Sarah Paynter joins the Yahoo Finance Live panel to discuss virtual home buying and how homes are selling during the pandemic.

Video Transcript

AKIKO FUJITA: Welcome back to Yahoo Finance Live. Just three hours into the trading day, we are seeing techs stage a comeback, if you want to call it that, especially after the big sell-off we've seen over the last few days in the rotation out of the sector. The NASDAQ now up 216 points, the Dow up 69, and the S&P 500 up 30 points there.

One of the big bright spots in this economic recovery has been the housing sector. Certainly, a lot of competition out there with new home-buyers, trying to get in on very limited inventory. And now, increasingly, these home-buyers looking to buy their next home without ever viewing them.

Sarah Paynter is here to bring us that story. And Sarah, you've talked a lot about just how competitive the market is right now. But where are we seeing this? Is it on a national level? Is it really confined to individual markets that have an especially hot?

SARAH PAYNTER: Hey, Akiko. So yeah, we're seeing a lot more people buy homes without actually seeing them, just relying on virtual tours. And a lot of the time, that happens when people are moving to a new state. So we have a lot of suburbanization right now, people moving from cities. Maybe now that they can work remotely, they want to live in Colorado, or you know, somewhere mountainous, somewhere beautiful that is remote. And so a lot of times, they will go ahead. Not a lot-- 5%, but still much more than before, we're seeing people purchase those homes without setting foot in them first.

ZACK GUZMAN: And I wonder how much of that really stems from this being an incredibly hot housing market right now. But it is kind of cold for one region of the market. That would be first time home-buyers. We're seeing some weakness there, as prices continue to rise. Why is that right now, Sarah?

SARAH PAYNTER: Yeah, so this year was supposed to be really good for first time home-buyers. Because there are a lot of them coming into home buying age of the millennial sector. But what happened is, because of the pandemic and so much demand for housing, in part, driven by low mortgage rates, everybody was trying to get into the market. And that drove prices up really high. Most first time home-buyers are looking for homes that are in the $200,000 range or less.

And right now, the median home price is $350,000. So that is way out of range. And those homes that are less expensive, they're getting more expensive. And they're also flying off the market really quickly. So it's very hard for first time home-buyers to find something that they can actually afford to buy.

AKIKO FUJITA: Yeah, it certainly points to just how heated the market is right now. Sarah, going back to your earlier point, though, about just how many people are actually buying now without actually viewing their homes. I mean, it does also speak to where we are right now, which is in the middle of a pandemic.

I've seen the links on a lot of these homes that are listed on these sites about being able to take the virtual tour. How much do you think this is a permanent shift? Or is it really just something that has come out of necessity?

SARAH PAYNTER: I had the same question, Akiko. And what I've been told by economists is that yes, in the short term, this is a bump, driven by the pandemic. But it also costs the technology to move forward. And so we have that lasting infrastructure now that people know how to create these 3D tours and are used to operating, even realtors, like, FaceTiming their clients to show them the property. And so now that we're used to doing it that way, it's going to be more accessible. And that's going to be lasting beyond even just the necessity, going into convenience after the pandemic.

AKIKO FUJITA: Yeah, some interesting trends for sure, emerging out of this pandemic. Sarah Paynter, appreciate you bringing us that story.