Every seller wishes they had a crystal ball to tell them when their house will sell. Unfortunately, there’s no easy answer to that question because luck and circumstance play such an important part in the process.
However, with a little research homeowners can get a good idea of what to expect when their house goes on the market. Plus, there are steps they can take to hurry the process along.
Estimating Days on Market
Real estate professionals use several measures to determine how long it takes to sell a home. The easiest to understand is “days on market”–the number of days a home is listed before the seller agrees to an offer and the property is delisted from the MLS. Many economists prefer other terms which give a better picture of the balance between demand and supply but are less useful to sellers. These include “months’ supply”—the number of months it will take to deplete the current inventory of homes for sale in a market and “age of inventory”—the median age of all homes for sale in a market.
The time it takes to sell a home has been declining since the beginning of the housing recovery in late 2012. According to the National Association of Realtors, the median days on market for homes sold in September 2015 was only 49 days, down slightly from 56 days a year ago. It is taking an additional 41 days to close the sale.
These numbers are national medians; they vary significantly by market and even by neighborhood. In Washington DC in September, for example, the median time on market was 14 days, but directly across the Potomac River in Arlington, VA, houses were selling in 30 days, more than twice as long. In markets where sales have been brisk, generally in the West and Pacific states, time on market is shorter.
There is a distinct seasonality to real estate markets. Both demand and supplies of homes are greatest in the spring and early summer, then decline slowly through the late summer and fall. After the holidays, sales are very slow until the beginning of the new sales season in early spring.
The time it takes to sell a home reflects these seasonal patterns. Median days on market can vary by 30 percent or more depending on the time of year. That’s one reason why most sellers list their homes first thing in the spring when demand is high.
You can find data on the median days on your market from your Realtor. Many state and local Realtor associations and multiple listing services also publish information on months’ supply or days on market on their Web sites each month.
Why Sales Times Vary
Geography is only one factor affecting the salability of homes. Supply and demand vary by price of house and sales times vary correspondingly. The influx of Millennials into the housing market has put pressure on lower priced entry level homes. As a result, they are selling like hotcakes in markets like Denver, Dallas, San Jose and San Francisco. Luxury homes (priced over one million) are truly a different market and factors that affect buyers’ income like the stock market or international exchange rates.
The design, location, condition, age, number of baths and bedrooms, improvements staging and quality of construction all affect how quickly a house sells. Today’s buyers generally favor open spaces and fewer walls between common spaces like dining and living rooms. Larger kitchens and baths are also desirable, but also expensive to build into houses built decades ago. The effort put into getting a house ready to sell can shave days off its days on market. Professional stagers know how to emphasize a house’s strong points to catch a buyer’s fancy on their first walk through.
When you run out of time
When you begin to run short on time, the time has come when you should reassess your pricing strategy. Ninety days is considered plenty of time to test the market. If interests are slim during that time, you might want to update your research on sales trends in your immediate market to see if the assumptions you made when you set a price on the house are still accurate. If not, a modest price reduction might be in order. A well-timed reduction, especially one that takes you below a price point like $500,000 or $400,000, attracts a whole new audience of buyers who have their computers set to send them emails about new listings within $50,000 or $100,000 price brackets. You’ll give your listing a second lease on life.