Mythbuster: Homes actually DO SELL during the holiday season!
Quite often, too often in fact, REALTORS® hear home sellers say that they want to take their home off the market for the holiday season. Their concerns usually stem from the misconception that buyers are not looking during November and December because they’re halting their search for the holidays. Although this may be true in some cases, it is not always the case.
Typically, for home sellers who list in early fall, their home can stay on the market longer than anticipated because the inventory during that time is typically at a high point for the year. More inventory means more buyer selection and thus it takes longer for homes to be sell than if there were fewer homes on the market. September and October are usually the months with highest inventory, and as those homes sell or people begin taking them off the market during late fall, inventory decreases in November and December.
This September, mortgage rates have finally shown a decrease, bouncing off the lowest they’ve been since February 2023 but since settling in in the mid 6%’s which is still substantially better than it has been. With borrowing more affordable than it has been in over a year and a half. This excitement caused the fall 2024 market to kick off with some steam and its unlikely buyers who are motivated to buy before 2025 will stop until they get what they want addition, the increase in affordability coupled with more inventory has enticed, and in some cases enabled, more homeowners to make a move, helping to unlock the market somewhat.
There are years of pent-up demand, people with life changes such as relocation, family growth, tax implications, downsizing, divorce and changes in financial circumstances that continually drive the real estate market during the holidays. Buyers who are out there looking for homes on busy holiday weekends, or in northeastern wintery weather, are nothing if not motivated. These dedicated buyers are the most likely to make serious offers if they’re interested in your home. It is a known fact that although the quantity of buyers is lower during the holidays, the quality of the buyer is often substantially greater. And for buyers, remember that sellers whose homes are on the market during the holidays are often quite serious about selling.
Show Me the Facts
If you are skeptical, here are the stats for Massachusetts from 2017 – early fall 2024. Each year on Labor Day weekend (week 35) we see a dip in inventory levels. However, after this dip, inventory trends upwards for several weeks before turning back down again through the end of the year.
2024 started off a little lower than the beginning of 2023, but for the rest of the year has steadily risen, see yellow line in chart below. As of week 40, inventory is higher than it has been in nearly four years. Regardless, what is likely to happen is that inventory will make its seasonal descent right around this week or next. Inventory is still historically low, so even if it doesn’t drop like previous years, supply will still be constrained, and it’ll be competitive out there for buyers.
Every state behaves a little bit differently and some are struggling with lower inventory, but the trends are all generally the same, see images below.
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South Florida, of course, has a different seasonal pattern as it doesn’t contend with the slippery, cold and snowy weather during the holidays. Prior to the pandemic, you can see the seasonal dip during the holidays exists, but not to the extent that is seen in the northeast. The past few years, inventory has struggled to keep up, but this year it’s rising back to pre-pandemic levels and it’s likely we will still see that slight drop in November and December.
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What does this mean? A drop in inventory during this time means that there are fewer homes for the motivated buyers to compete over. That is because some sellers do wait, but that is also because buyers are still buying. Lower inventory gives sellers the opportunity to sell for more money and negotiate for an optimal closing timeframe, especially if these sellers are also buyers. This makes it advantageous for sellers to list during the holiday season.
Pending Sales Per Week in Last Year
One of the many metrics we track on a weekly basis at Lamacchia Realty is the percentage of homes which are under contract compared to the number of homes on the market (inventory) each week. It provides us and our clients with very telling data about how active the market is.
Throughout November and December, there is a decrease in the percentage of homes that are pending (UAG), but you may be surprised at how small that decrease is. From the week after the fourth of July to the last week of August in 2023, an average of 20.66% of homes went under agreement out of the total inventory.
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From that point on until the end of the year, if you take out the week of Thanksgiving and the week of Christmas, when many banks and companies are closed, 16.37% of homes are under agreement compared to the total inventory. That’s only 4.3% lower than the busy summer months! Buyers are still buying!
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Pending Sales Per Week This Year
This year, the month of September averaged 15.46% of homes that were under agreement compared to the total inventory, and year to date there is a 2% increase in the state of Massachusetts over last year in the number of homes placed under agreement. There is still the rest of October, November and December for buyer and sellers to take advantage of the softening in rates. Even for the sellers out there still clinging to their pandemic era rates but have life changes requiring that moves are made, there are creative ways to get the deals done. Buydowns and mortgage assumptions are making it possible for buyers and sellers to leverage lower rates than what’s currently available and homes are still selling.
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The Buyers Still Looking in November and December Want a Home!
Year after year home buyers do look for homes during the holidays. Buyers who look during that time tend to be more serious because the casual lookers tend to delay until after the holidays.
Joselin Malkhasian is a leading REALTOR® with Lamacchia Realty and she shares this story with many of her clients when they bring up the myth about buyers:
Joselin’s experience is all too familiar. Buyers want a home during the holiday months and there is no better gift than the keys to a new home. Throughout the year, the market typically shifts between the buyer’s and seller’s favor. The market we are in now is ever-changing and attempting to rediscover balance, so it is crucial to be well-informed and proactive if you are looking to buy this holiday season.
The deceleration of market activity is driven by higher-level forces such as rates, inflation, and to a certain degree, economic uncertainty driven by headlines regarding rates and upcoming elections. The point to remember here is that despite all these factors newly introduced to this year’s market, buyers are still buying, and sellers are still selling. Don’t miss your chance to capitalize on the motivated buyers and sellers in this current market before the new year hits and the spring frenzy takes off!
Hang in there, and if you have any questions about listing in the winter, buydowns, or mortgage assumptions, contact me and I can help guide you through this process!