Wait until spring
Keywords: wait until spring
Description: Redfin real estate agents often get asked the question: "Is now a good time to list my home?" Redfin dove into the data to find out.
Redfin Report Confirms That Spring is the Best Time to List a Home, But It’s Only Marginally Better Than Winter
2015 is already shaping up to be a strong year for the housing market. In January, Redfin reported record buyer demand for home tours and offers, with standing-room-only home-buying classes, open houses more crowded than a subway car during rush hour and bidding wars involving more than 20 competing offers. With demand already surging, should you get your home on the market now, or follow conventional wisdom and wait until spring?
There are a lot of ways to go about answering that question. The last time we did. we focused on homes listed near the bottom of the market around 2012, when inventory was at historic lows and buyers were in a frenzy, and found that listing in winter offered the best payoff. But this year, Redfin examined more than 7 million homes listed from 2010 through 2014 to see how many of them went under contract within 30 days and how often they sold for more than their list price. We chose these metrics because they’re two of the simplest and most common objectives someone has when they list their home for sale.
For the best chance of selling your home quickly and at a premium, your best bet is to list it in the spring: 39 percent of homes listed between March 21 and June 20 in the past five years went under contract within 30 days and 15 percent of them sold for more than list price. But winter is a very close second bet, just one percentage point behind in each measure. Summer wins bronze, with 36 percent of listings under contract within 30 days and 12 percent selling at a premium. The data suggests that if you have a choice, avoid listing your home in the fall, when people are more focused on things like the start of the school year and getting ready for the holidays than shopping for a home. Thirty-four percent of homes listed in fall went under contract within 30 days and only 11 percent sold above list price.
“Just as buyer demand follows a seasonal pattern, so do home prices” says Redfin Chief Economist Nela Richardson. “Over the past five years prices have increased by an average of 3 percent month over month in the spring and ticked down by about 1 percent each month during the fall. To get the best of both worlds, sellers need be informed on both local buyer demand and recent sale prices in their neighborhoods before deciding when to list their homes and for what price.”
Another takeaway is that there’s really not a huge advantage or disadvantage to listing in any season, as the numbers vary by just a few percentage points. “The decision of when to list usually comes down to what’s best for the seller,” says Redfin agent Sam Khosh in Washington, D.C. “About half of the clients I’m working with at any given time are on a schedule dictated by a job relocation or their growing family, and not because they strategically chose a certain time of year based on expected demand.”
At the local level, there’s very little divergence from the national trend, even when comparing regions with vastly different climates, like Phoenix and Boston.
In Boston. it simply comes down to snow. “Take this week for example,” says Redfin agent Shawn Flynn. “Bostonians have a high tolerance for inclement weather, but with four feet of snow on the ground, even the Patriots’ victory parade was delayed. Every year there are a handful of blizzards and freezing cold days that keep people from venturing out to shop for homes. So once the snow clears in the spring, serious buyers are ready to act quickly.”
“In Phoenix. there’s a very short window right before school lets out when the market sees the most action,” explains Redfin market manager Marcus Fleming. “People leave town to escape the heat by mid-summer, so serious local homebuyers get under contract by May or June. Winters are driven by snowbirds and out-of-towners relocating to Phoenix, most of whom need or want to be in their new home by January 1.”
But there are some outliers, including many California markets. In Los Angeles. Orange County. San Diego and San Francisco. spring and winter are tied for the best home-selling performance, and summer and fall aren’t too far behind, and are also nearly identical. That makes sense, given the limited changes in weather those areas experience among seasons. But in Sacramento, winter stands out as the winning season to sell your home, with a four-point advantage over spring in terms of the likelihood of selling quickly and a two-point increased likelihood of selling at a premium.
“In 2012 and early 2013, the Sacramento market was dominated by cash buyers and corporate investors buying up distressed properties, driving sales up especially in the winter of 2012 when the bulk of the purchases were made,” says Redfin market manager Jeff Werolin. “The unusual seasonality continues today as the drought means February feels like May, so homebuyers are acting like it’s spring. Sellers, however, are taking their time, so the unmatched winter demand means homes go off the market quickly and for more than asking.”
See below for market-by-market home-selling performance data for homes listed from 2010 through 2015. Your local Redfin agent who knows the latest ins and outs of the housing market in your neighborhood will also be able to provide insights on when it’s best to list your home.