Cooling temperatures usually signal a cooling housing market. Does that hold up in the wild housing market of the pandemic? Looks like at least a bit.
A recent analysis by Santa Clara, California, real estate listings website Realtor.com found the best time to buy a home is fast approaching — or has already arrived — for major metros across the U.S. Based on a composite analysis of listing prices, inventory levels, new listings, time on market, homebuyer demand and price reductions, Realtor.com determined, nationally, the best time to buy a home this year will be between Oct. 3 and 9.
There’s some variation, based on metropolitan area. For metro areas in colder climates like Denver-Aurora-Lakewood, Colorado, the best week to buy a house is the current one: between Sept. 12 and 18. Among the latest of the metros analyzed by Realtor.com is Tampa-St. Petersburg-Clearwater, Florida, the week of Jan. 10 to 16.
But what does “best time” mean in 2021? More listings, fewer buyers to compete with and, potentially, average savings of $10,000.
Among 10 markets where the current week is the best time to buy, Sept. 12 to 18 has, historically, had 27% more listings on the market, on average, compared to other weeks of the year. One of them, Detroit, typically has 69% more active listings this week than the average week, says Realtor.com.
Danielle Hale, chief economist at Realtor.com, said there have been signs of the market slowing down in recent weeks relative to this past spring.
“That said, the market has been such a sellers’ market for such a long time, even if it’s cooling off, it’s still going to remain more competitive than what we’ve seen in most other years,” Hale continued.
“Best time” also doesn’t necessarily mean the cheapest time to buy, Hale added. That’s more likely to be during the winter but, during those months, there’s usually less inventory than the fall, as sellers tend to hold off on listing their homes until the spring at that point.
The fall and winter months in 2020 generally outperformed pre-pandemic, cooler-weather months, owing in part to a delay from the usual spring homebuying season last year.
Matt Dolan, licensed real estate broker with Sotheby’s International Realty in Marblehead, Massachusetts, said in his market, there was a lot more demand last fall and winter than what’s typical in the so-called offseason.
But, he added, the area he’s in sees a somewhat different cycle than other markets. He said there’s a “sprint” from when the last snow melts to the Fourth of July, then activity slows for a few weeks before picking back up around Labor Day and dropping off again around Thanksgiving.
“We are seeing a little bit of the pressure taken off but I wouldn’t call it slow,” Dolan said about activity in his area. “It’s slower due to a lack of inventory.”
Whether the fall and winter will be unseasonably busy like 2020 depends on what’s going to happen more broadly around the virus, Dolan said. He said if it feels like things are moving past Covid-19, a more normal housing market is likely, although, he continued, there’ll be other concerns: namely, how inflation and interest rates could impact housing.
Hale said, nationally, sellers have been listing their homes later than usual this year. About 432,000 homes were newly listed in August nationally, an increase of 4.3% from the prior year, according to Realtor.com. Listings were 5.1% higher in large metros during the same period.
But newly listed homes were still down 8.6% in August from the typical rate between 2017 to 2019.
Another aspect of the housing market creating headwinds for buyers: investors snapping up homes to lease them as single-family rentals. Those buyers may not necessarily be tied to calendar events, such as back-to-school and the holiday season, as owner-occupiers tend to be.
Hale said Realtor.com didn’t specifically look at investors in its analysis of the best time to buy.
“I would expect investors are a little more timeless in their activity level, and especially since they don’t have all of these things and activities that tie owner-occupiers, they probably are more able to take advantage of seasonal sweet spot,” she continued.
Dolan, an investor himself, said the pandemic has shifted people’s perceptions about where they want to invest. A desire to spend money on enjoyable pursuits has, for example, become a bigger priority, he continued. Real estate is perceived as one way to do that, Dolan said, whether it’s buying a second home or purchasing an investment property for secondary income.