Understanding the seasonal trends in the real estate market is a crucial first step in determining the best time to sell your home. But, the decision to move is often a personal one. It’s important to take other factors into account like your financial situation, the current condition of your home, if you plan to make any improvements, and whether or not local market conditions are in your favor.
This guide will walk you through what you need to know when it comes to choosing the right time to sell. Here’s what we’ll cover:
The pros and cons of selling in each season
The best time to sell a house, by the numbers
Spring is typically thought of as the best time to sell a house since historically this is when most transactions occur and when homes sell the fastest. Seasonality impacts how supply and demand in the housing market change at different times of the year.
You can see the cyclical nature of the US housing market in the chart below. Like clockwork, new listings flood the market each year in May and pending home sales immediately spike in tandem.
Homes also tend to sell faster in the spring and summer months. The median days on market, which represents the median number of days a home is actively listed on the market before an offer is accepted, tends to be significantly longer in the winter. The typical U.S. home took 58 days to sell in January 2019 compared to 38 in May, according to data from Redfin.
But, as you can see from the table below, the time it takes to sell varies widely from city to city.
In Minneapolis, for example, the typical home sold 30 days faster in May than in February 2019, when the average high temperature was just 29 degrees. In cities with more temperate climates, such as Los Angeles, the median days on market are usually much less volatile, allowing for a longer selling season.
Sometimes other market fundamentals trump bad weather. Thanks to a booming economy and growing tech sector, homebuyers in Denver hardly skip a beat in the dead of winter. Despite freezing temperatures and the height of the holiday season, the typical home in Denver sold in just 31 days in December 2018.
Homes not only usually sell faster in the spring and summer, they are also more likely to sell at or above the asking price. The seasonal pattern for the sale-to-list ratio—a percentage that compares a home’s final sale price to its list price—follows a similar seasonal pattern as the median days on market.
A sale-to-list ratio of 100% means the average home sold for its asking price. Anything under that shows sellers had to lower the asking price, suggesting there could have been fewer buyers on the market. In the table above, you can see that the sale-to-list ratio increases steadily in nearly every market as spring approaches, and in some markets, the average seller received more than 100% of the asking price.
Even just a few percentage points can make a big difference. In Portland, OR, for example, the sale-to-list ratio increased more than a full percentage point from January to May in 2019. For a home listed at $400,000 in the Portland area that means a difference of nearly $5,000 for a seller that lists in May.
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5 factors to consider when choosing the best time to sell
Generally speaking, selling in May or June can mean a faster home sale at a higher price. But just because many homes sell faster and for more money during these few months of the year doesn’t mean that this is necessarily the best time for you.
In addition to keeping your eye on the calendar, here are five factors to consider.
1. Life happens. What are the consequences of not moving?
According to the latest data from the Census Bureau, 16% of people who moved in 2018 did so to upgrade to a new or better home. But sometimes life happens, and sometimes selling your home becomes a necessity.
Top 5 reasons people moved in 2018
To upgrade to a new or better home – 16%
Starting or growing a family in one’s own household – 13%
Other family reasons such as caring for older parents – 11%
Relocating for a new job or job transfer – 10%
Need to find cheaper housing – 8%
Waiting for a better season might have greater consequences like missing out on a job opportunity or delaying an important life goal.
2. Is your home in the best shape to sell?
Consider how much time and effort it will take to prepare your home for sale. If your goal is to sell fast, then it might be better to focus on minor repairs and cosmetic updates with short, predictable timelines. If you’re not in a hurry then choosing the right remodeling project can be a great way to add value to your home and maximize your sale price.
You may also want to skip the home prep and repair work all together. One option is to list your home and adjust the price to reflect its condition. You could also get an offer from an iBuyer. For example, with Opendoor you can request a competitive, all-cash offer online without having to show or list your home. If repairs are needed, we’ll ask for a credit and deduct the costs from your net proceeds. We let you choose your close date, and we handle the work after you move out.
3. Is the local housing market working in your favor?
Apart from seasonal trends, there are other market forces at work. You’ll often hear the real estate market described as either a “buyer’s market” or a “seller’s market” depending on how competitive it is to buy versus sell.
To determine the best time to sell, it’s important to understand if the conditions of the market where you’re selling a home and buying a home are working in your favor. For example, how fast are home prices appreciating in your neighborhood? How does that price growth compare to where you want to buy? Are homes selling quickly? Or has inventory started piling up with slower sales?
We explain how to use data to understand your market on our local real estate trends page, where you can explore market data for your zip code. For a macro perspective on the housing market, see our annual guide on housing market trends.
4. Can you afford to sell your home?
From agent fees to home improvements to unexpected concessions, the total cost of selling a home can add up to ten percent of the sale price.
According to recent data from Bankrate, most homeowners do not build enough equity in their home to offset buying, closing, and moving costs until they’ve been in their home for around five years. Use our home sale calculator to estimate your costs and net proceeds, so you’ll have a clearer picture of how much money you’ll pocket after selling your home.
5. The total cost of buying your new home
Once you understand how much it will cost to sell your home you can start building a budget for buying your next one. Of course, the list price is just the beginning of the costs involved.
According to a recent Opendoor analysis on the cost of buying a house, we’ve estimated that closing costs, the cost of moving, and purchasing new furniture can add up to nearly $40,000 more than the list price for a median-priced home.
-> See our guide on how much it costs to buy a house for more information on our analysis and to get an idea of all the expenses involved.
What to expect if you can’t sell in the spring
Selling in the spring clearly has its benefits. Unfortunately, everyone doesn’t have the luxury of timing their sale within three months out of the year. But depending on your location and personal priorities, the data above shows there are pros and cons to selling your home no matter the season.
Selling your home in the summer
According to the data, selling in the summer often provides almost as much advantage as the spring. Typically, the days on market are still low and the sale-to-list ratios are near their highs well into August. However, there are still trade-offs to consider.
Urgency is increasing for buyers who need to move in before the school year starts.
According to the national data cited above, fewer new listings are added to the market than in the spring, which means sellers have less competition from other listings.
Sellers can be more strategic since they will have a clear idea of how the market has performed during the peak months.
Depending on your location it may just be too hot for buyers to come out. The median days on market in Las Vegas, for instance, was higher in August of 2019 than it was in December of the previous year, according to the table above.
Based on the decline in pending sales in the U.S. illustrated in the chart above, there are typically fewer buyers on the market as many have already closed on their dream home in the spring.
You might face competition from other sellers who are desperate to move in time for fall and therefore are willing to slash their price and offer more concessions.
Selling a house in the fall
Sure, the holidays are approaching, but the in-laws aren’t on your doorstep quite yet. Things have slowed down considerably since the spring, but homebuying activity is still robust in many markets.
After selling activity peaks in the U.S. in May, fewer new listings hit the market each consecutive month in the fall, as illustrated in the chart above. This means sellers have less competition as buyer choices dwindle.
Motivated buyers may be eager to close before the holidays so a well-timed fall listing could add just the right amount of pressure.
Your cost for moving into your next home could be much lower than in the spring, saving you money on the back end of your sale.
Even in markets with high demand, home sales usually slow considerably beginning in October. In the fall of 2018, from September to October, the median days on market increased by nine days in Austin, eight days in Houston, and seven days in Sacramento.
Since most buyers who are out in the fall are not feeling the pressure of moving before the school year begins, their timeline may be more flexible and mean they are willing to wait to get what they want.
The weather is beginning to get unpredictable in some markets, making it more difficult to time showings and make repairs.
Selling your home in the winter
Winter is by far the scorned stepchild of homebuying seasons and the cons, in some cases, are obvious. But there are a few key advantages to selling in the winter that may surprise you.
Many homes on the market in the winter have been sitting for months and may be overpriced. Your new listing could catch the eye of buyers who have been searching to no avail.
Winter buyers are likely serious buyers. Yes, your open house may have fewer visitors, but those who brave the elements to check out your listing are probably not messing around.
With winter being a slow season for contractors it may be the perfect time to make home improvements or save money on necessary repairs that crop up during your inspection.
Although the buyers may be more serious, many of them are also looking for a deal. Beware the bargain basement shopper if you list in winter.
Creating the perfect curb appeal can be tough. If you are in a weather-impacted market you might consider having the listing photos taken in the fall so buyers can see all of the property.
Two words: the holidays. Between the sellers, the buyers, real estate agents, mortgage brokers and all of the other parties involved, it’s hard enough to get everybody on the same page and close a transaction smoothly. A busy holiday season complicates the process.
The best time to sell your home is the time that it makes the most sense for you. It’s true that homes tend to sell more quickly and for closer to the asking price in the spring, but that doesn’t mean that listing your home in May will guarantee an ideal outcome.
Many of the homes that are sold in the slow months at the end of the year were, after all, listed in the spring. They just didn’t sell. This could be because the sellers ended up asking too high a price, which is one of the most common reasons that homes sit on the market.
By doing your research, pricing your home competitively and choosing the right offer, you’ve already set yourself up for success.
By Jeffery Marino
This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.
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