When you’re preparing to list a home for sale, one of the variables you’re sure ponder is how long it will take for the property to sell. The length of time a home stays on the market can have major implications for many sellers, especially those looking to purchase and move into a new home during the same time frame.
Nobody wants to be stuck with a house languishing behind a weathered “for sale” sign holding up their ability to move onward, but the good news is that in today’s hot housing market, homes are selling very rapidly. Sellers, especially in areas where housing is in high demand, should not expect much time to lapse between the day they list their property for sale and the final closing date.
How Long Is It Taking?
According to data analyzed by the National Association of Realtors, the median length of time a home stays on the market before selling is just three weeks. That’s down from a median of eleven weeks just five years ago. If you’re about to list a home for sale, don’t count on having much time to find and purchase a new place to move into!
Why Are Homes Selling So Fast?
The main thing driving the rapid pace of home sales these days is low housing inventory. A shortage of available homes in a competitive market leads to motivated buyers making offers on the spot and getting into bidding wars for desirable properties.
The raw data backs this up – this year, only 800,000 new homes have been built and put on the market. That’s down from 1.2 million new homes built in years past. Underproduction over the past decade has fed into the current housing shortage, which puts sellers at an advantage when it comes to selling homes quickly and for the asking price they want.
In the most competitive housing markets, like San Francisco, Boston, Denver, and Seattle, sellers can expect their properties to get snapped up even faster. It wouldn’t be unheard of for a good home to sell in less than a week.
What It’s Like Out There for Home Buyers
All this is good news for buyers, but the fast pace of today’s housing market can pose a real challenge for buyers. Buyers with the means and motivation are making cash offers at open houses, sometimes offering even more than the asking price, or agreeing to escalation clauses – pledges to beat competing offers by up to a certain amount.
To get an edge in these markets, buyers need to be ready to move on a property quickly, have their loans pre-approved, and go to open houses prepared to make offers on the spot and compete with other buyers. In booming real estate markets, open houses can be crowded, cutthroat affairs, with lines stretching out the door in some cases. Some buyers might even try to make a deal to see the home before the actual day of the open house.
With recent gains in the job market and the overall economy, more and more buyers are out there looking to find great homes in a real estate market that hasn’t yet grown its inventory to match demand. Sellers should expect fast turnaround on the properties they list for sale, and buyers need to be ready for stiff competition for the home of their dreams.