Originally posted by Thomas Powers on Monday, April 13th, 2009 at 11:51am.

 

Sellers ask me the same question all the time: “When is the best time to sell a house?”  The answer can be found in general buyer patterns.  Typically, this is the pattern:

·         February, March, April, and May—buyers look for and put offers on homes

·         April, May, and June—buyers settle on their homes

·         July and August—people take vacations

·         September and October—kids go back to school, and there’s a small uptick in buying activity after people return from vacation

Given this pattern, a home should be listed by February or March for full exposure to the majority of buyers.  This certainly doesn’t mean that you can’t list your home in December or August, but buyer activity tends to slow down then.

Often sellers mistakenly think they should begin the process of listing their homes once spring is blooming.  However, effective marketing and home preparation take time and must be done before a home is actually listed for sale.  So, it’s wise to plan ahead to list your home for a spring buyer’s market in February or March. 

 Timing is especially important in the Washington D.C. area, which has one of the highest concentrations  of prospective buyers with Ph.D’s and M.D.’s. This means the buyer pool has a large number of people who can look early and often for homes.  Spring weddings are another important factor, because many engaged couples want to have their home needs met before wedding chaos takes over their lives. Thus, if a wedding is in the spring or summer, the home search and purchase will typically take place in late winter or early spring. Listing your home in February or March will allow you to target those potential buyers.

On the flip side, listing early can have its challenges.  For example, it’s a bit of a challenge to price a home for a market that has not fully hit.  Realtors use recent comparable sales (comps) to suggest pricing for homes to sellers.  In today’s constantly changing real estate market, the last comps from the fall spike might not reflect the needs of spring buyers. 

Demand Drives Value

The inventory of homes was very low at the end of the real estate year in 2004 and the beginning of 2005 because demand was through the roof. For example, I listed a home for $725,000 in January of 2005(which was a much higher list price then the sales at the end of 2004), and it sold quickly at full price. That shows how buyers really drive the value of homes one way or the other. When the market is hot like it was in 2005, prices go up.  Conversely, if buyers are strapped for cash or credit and there’s a high inventory of homes that must compete with distressed short sales and foreclosures that are priced ridiculously low—a situation we find ourselves in today—prices tend to fall. Either situation can happen seemingly overnight.

In a slower market, it’s helpful to be ahead of the trend and price your home appropriately based on the previous  year—the opposite of a hot market, where you can increase your selling price in anticipation of greater demand.  Sadly,  in a down market, what is perceived as a low sale in January or February seems to be a record sale in June or July.

As always, I invite and encourage your comments on this or any real estate subject.

Thomas Powers

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