How long it takes to sell a house is heavily influenced by factors that the seller can and sometimes really can't control. And a lot of it has to do with, to amend a cliche, location, location, and timing.
Let's begin with the latter. Here are two ways to think about timing when it comes to selling your house:
- The time of year.
- The current market conditions.
A season for selling
The best time to sell your house is when most people are looking, right? That naturally means late spring for many, when families with children can time things so they get out of their current place after the school year ends and into their new place before it begins. But what does the data say?
The National Association of Realtors says that 4 out of 10 home sales each year occur from May through August. That's backed up by some financial findings from ATTOM Data Solutions, whose research found that the seller's premium -- the difference between the median actual sales price for homes when they closed and the median automated value for those same properties -- was highest in June at 9.2% and lowest in October and December at 3.3%.
Location, location, inventory
The average real estate duration for a listing varies from market to market; indeed, from neighborhood to neighborhood and street to street. Still, it's worth looking at the big picture, and right now, barring major disruption from the coronavirus (COVID-19) outbreak, the national housing market is hot.
That's good news for homeowners about to put their property into the real estate pool, both in terms of how long it will take to sell and how high a price you can command.
The National Association of Realtors said its February 2020 data shows the lowest inventory levels on record for single-family houses, condos, and co-ops, at least since it began tracking in 2012. In fact, the NAR says, February inventory dropped 15.3% from 2019 to 2020, the equivalent of 184,000 units.
That brings us to a key metric: average number of days on the market (DOM). This covers the time between the day it's listed and the day the seller accepts an offer. The national average for selling a house in February was 80 days, an improvement of three days from last year.
DOM by market varies widely. Among the 20 large markets ranked by year-over-year decline in inventory, median DOM ranged from 18 in the San Francisco-Oakland-Hayward market to 69 in Philadelphia-Camden-Wilmington, according to the NAR. Median prices also vary wildly, from $1.2 million in San Jose-Sunnyvale-Santa Clara to $284,500 in Cincinnati’s Ohio-Kentucky-Indiana market.
Indeed, demand will go a long way to determining the price you can command. The widely followed Case-Shiller Index reported in January that nationally, home prices increased 3.5% year over year in November after a similar 3.2% jump in October. The hottest markets were in Tampa, Florida, Charlotte, North Carolina, and Phoenix, Arizona.
While every market is different, there are some common threads the prospective house seller can follow to enhance prospects.
Enticing price and curb appeal, inside and out
As any experienced real estate agent will tell you, it's pretty easy to scare off any prospective buyer by asking too much when you first list the property, even if the home has great curb appeal and is in a desirable neighborhood with great schools.
Ask too much, even if you have in mind taking a much lower offer, and the house may sit longer than you want or can afford. If you can wait it out, set a slightly higher price. If not, you don't want to give it away, either. A good way to handle that conundrum would be to identify a realistic price range for your house -- think nearby comparable homes, or comps -- and then ask on the low side of that range.
Curb appeal -- really, appeal inside and out -- also is a critical aspect. Look around your neighborhood and see how you compare. A neighborhood with predominantly older homes is naturally going to show more range of wear and care, so balance how much you want to give up in price to how much you want to invest in spiffing up the place.
As for the interior, the conventional wisdom has long been that the best return on your real estate investment inside the home when it comes time to sell are kitchen and bathroom updates. There's a reason that wisdom is conventional. It's typically true. But there's more. For instance, paint colors also really matter.
It's easy to do your own research on such topics, but here's a quick start: A Reader's Digest article that cites an extensive study found homes with jet black, charcoal, or smoky-colored doors sold for $6,271 more than expected. Of course, there must have been other factors, but read it yourself to see what you think. It's an interesting insight. Who knew a coat of paint could make such a difference?
The agency of agents
Realtors live on real estate commissions, but the smart ones know that an overpriced house is not likely to sell anytime soon, and many won't work with you if that’s the case. If an experienced buyer's agent says you're overpriced, you may be well advised to take heed if you want to sell your house anytime soon.
Speaking of agents, doing your homework to identify the right agent and real estate brokerage also can help speed up the sale of your house. There are ample sources on the internet, including Zillow (NASDAQ: Z) (NASDAQ: ZG) and Redfin (NASDAQ: RDFN), that will tell you days on the market for individual agents and the markets they work. Again, DOM is the acronym to watch for here.
You can try to sell your home yourself, of course, and avoid paying the real estate commission. In really hot markets, word of mouth is sufficient to get a house sold in many cases. I once sold my own home in Charlotte, North Carolina, in less than a week. Other times, it was abundantly clear that appearing in the multiple listing service (MLS) in my market at the time, with the exposure and financial incentive of the area's Realtors to bring potential buyers, was what it took to sell.
The bottom line
When it comes to how long you can expect it will take to sell your house, there's no single answer for every situation. Every market is different, as is every seller's needs and wants. But there's no substitute for knowledge about your market and what you can do about your own property to make a sale more likely to happen quickly and profitably. Indeed, a little research can go a long way toward tempering expectations and leveraging any advantages you can seize in terms of timing and location.