How Long Do Houses Stay on the Market?

When you’re buying or selling a home, one of the crucial factors to consider is the duration that how long do houses stay on the market. This duration, often referred to as ‘Days on Market’ (DOM), can significantly impact both the selling strategy for homeowners and the buying approach for prospective purchasers.

For sellers, a shorter DOM can lead to a quicker transaction and possibly a higher selling or listing price. For buyers, understanding DOM can help gauge the demand and competition for homes in specific areas and possibly highlight opportunities for negotiation.

Five Factors Influencing Time on the Market

Here are several key factors that can influence how long a property remains listed before being sold.

Pricing

Homes priced at or slightly below market value tend to sell faster than those priced above market rates.

Market Conditions

Whether it’s a buyer’s or a seller’s market dictates how fast homes are selling.

Location

Properties in sought-after neighborhoods or with access to amenities generally spend less time on the market.

Property Condition

Homes that are well-maintained and ready to move in attract more buyers and tend to sell the house quickly.

Marketing

Effective marketing strategies, including online listings, professional photography, and home staging, can reduce the DOM.

Five Key Factors: How Long Do Houses Stay on the Market?

How Long Do Houses Stay on the Market?

Price

  • Setting the Right Price—One of the most critical factors in how long a home spends on the market is its price. Homes priced too high may deter potential buyers, leading to a longer time on the market. Conversely, price reductions on homes that are too low might sell quickly but can result in the seller not maximizing their potential return.
  • Market Analysis – Sellers must understand the current market conditions and set a price based on comparable sales in the area. This approach, known as comparative market analysis (CMA), helps in pricing a home competitively, significantly reducing its time on the market.
  • Adjustments and Negotiations – Pricing should also be flexible. If a home isn’t attracting buyers after a few weeks, revising the price or being open to negotiation can help speed up the sale.

Location

  • Desirability – Location is a paramount factor in the real estate industry. Homes in highly desirable neighborhoods, such as those close to good schools, public transportation, and amenities (like shopping centers and restaurants), tend to sell faster.
  • Economic Health – The local economic environment, including job market strength and future growth prospects, influences buyer interest. Locations with robust economic growth are more likely to attract buyers, reducing time on the market.
  • Crime Rates and Overall Safety – Areas perceived as safer generally have a higher demand, leading to quicker sales. Sellers in less sought-after areas might experience longer selling times unless priced or marketed aggressively.

Condition of the Property

  • Move-in Readiness – Homes that are ready to move in and require no or minimal repairs typically sell faster. Buyers often look for homes that do not require immediate investment beyond the purchase price.
  • Home Staging – Staging a home can make a significant difference. A well-staged home helps potential buyers notice and visualize themselves living in the space, which can quicken the selling process. According to the National Association of Realtors, 83% of buyer’s real estate agent said staging a home made it easier for a buyer to visualize the property as a future home.
  • Professional Photography – High-quality images and virtual tours can highlight the home’s best features, appealing more to buyers and decreasing the time it spends on the local market.

Marketing Strategies

  • Online Presence – Phone calls are still okay, but in today’s digital age, having a strong online presence is crucial. Listings should be on all major real estate platforms and include multiple high-quality photos and a detailed property description.
  • Social Media Marketing – Utilizing social media platforms can help reach a broader audience. Targeted ads can attract potential buyers who are looking for properties in specific locations or with particular features.
  • Open Houses and Private Showings – Regularly scheduled open houses can attract more potential buyers. Private showings are also effective, as they provide a personal touch and a direct engagement with interested parties, potentially reducing the market time.

The real estate market often exhibits distinct seasonal trends that affect how long homes stay on the market. Understanding these can help both buyers and sellers make strategic decisions.

Spring (March to May)

Traditionally, spring is the hottest season for real estate transactions. Families prefer to move during the summer to avoid disrupting the school year, leading to increased buying activity in spring. Homes listed during this season tend to sell faster and often at higher prices.

Summer (June to August)

Although summer starts strong, the market often slows down by late summer. The beginning of the season is still a good time to sell, especially for markets in vacation-heavy areas, but by August, the pace typically slows as families complete moves before the new school year.

Fall (September to November)

The market experiences a slight pick up again in early fall. The weather is still favorable in many regions, and buyers are eager to settle into a new home before the holidays. However, the window is shorter, so timing is crucial.

Winter (December to February)

Typically the slowest season for real estate, with homes staying on the market longer due to fewer buyers. However, buyers in the market during winter are often more serious, which can benefit sellers.

As of March 2024, homes in the U.S. typically stay on the market for about 50 days before being sold, showing a downward trend from previous months, where homes stayed for 61 days in February and 69 days in January​.

This fluctuation illustrates the impact of economic indicators such as interest rates and employment rates on the real estate market. When interest rates are high, homes tend to stay on the market longer due to reduced buyer affordability. Conversely, low unemployment rates boost buyer confidence and purchasing power, leading to quicker sales.

Strategies to Minimize Time on the Market

To minimize the time a home stays on the market, sellers should focus on several key strategies:

Staging and Minor Improvements – Present the home in the best possible light by decluttering, repairing, and staging. These efforts can make a property more appealing to potential buyers.

Pricing Strategies – Setting the right price from the start is crucial. Overpricing can lead to a longer time on the market, while a competitively priced home can quickly attract more serious buyer demand.

High-Quality Photos and Virtual Tours – In today’s digital age, smart marketing and virtual tours are indispensable. They allow potential buyers to get a good sense of the property before visiting, expediting the selling process.

These strategies, aligned with current market data and trends, can significantly influence the average time it takes to sell a home.

Buyer and seller profiles in real estate are detailed representations or descriptions of typical buyers and sellers in a market. These profiles help most real estate agents understand the demographics, motivations, preferences, and behaviors of various groups involved in buying or selling properties.

Buyer Profiles

First-time homebuyers: These are typically new buyers, young professionals, or newlywed couples looking for affordable entry-level homes. They may require longer decision-making periods but are motivated by low interest rates and government incentives.

Upgrader – Usually mid-career individuals or growing families needing more space. These buyers are likely to act quickly if they find the right property that offers value for a higher investment.

Investor – Focuses on the potential return on investment. Investors are quick decision-makers, especially in markets with high rental demand. They prefer homes that can be easily rented or flipped.

Seller Profiles

Move-Up Sellers – Often selling their first home to upgrade to a larger one due to family expansion or financial growth. They might be flexible with pricing to facilitate a quicker transition.

Downsizers – Typically older adults whose children have moved out. They look to sell larger homes for smaller, more manageable spaces. Depending on local market conditions, they may sell to other relatives or family members below market value for a quick sale.

Estate Sales – Inherited properties being sold by heirs. These homes may stay on the market longer due to the complexity of estate settlement but might be priced competitively to attract buyers.

Days on Market (DOM) as an Investment Metric

Investors use the Days on Market (DOM) metric to gauge the liquidity of real estate assets and the health of specific markets.

Strategies Influenced by DOM

Market Selection – Investors prefer markets with a shorter DOM for short-term investments due to the quicker turnaround.

Pricing Strategy – Understanding the average DOM helps investors set competitive prices to accelerate sales in slower markets.

Renovation Decisions – In markets with longer DOMs, investors might opt for higher-end renovations to make properties stand out and sell faster.

Analyzing Trends – Investors should track DOM trends over time to predict market shifts. Rapid changes in DOM can signal upcoming opportunities or risks, influencing investment timing and strategy.

Final Thoughts

Buyers and sellers must understand the duration that houses remain on the market. This knowledge equips sellers with strategies to expedite the sales process and optimize pricing while buyers gain valuable insights into market trends and potential negotiation leeways.

Overall, grasping the time on market dynamics fosters a more informed approach to real estate transactions, leading to more confident decisions and potentially better closing costs and outcomes in this ever-evolving marketplace.

FAQS

What is “Days on Market” (DOM), and why is it important?

DOM refers to the number of days from when a property is listed for sale until it goes under contract. It’s a common metric used to gauge market activity and demand.

What factors affect how long a house stays on the market?

Key factors include pricing, market conditions, location, property conditions, and the effectiveness of marketing strategies.

How does seasonality affect DOM?

Real estate markets often see variations in DOM based on the time of year. For example, spring typically shows reduced DOM due to higher buyer activity.

What can sellers do to reduce their home’s DOM?

Sellers can ensure their home is priced competitively, make necessary repairs or upgrades, stage the home effectively, and use high-quality photos and virtual tours in their listings.

Does a longer DOM always indicate a problem with the property?

Not necessarily. While a longer DOM can suggest issues like overpricing or poor condition, it can also reflect a slow market or a high-priced, unique property that takes longer to sell.’

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