Home sellers on the fence waiting for that perfect moment to sell should start preparations, because the best time to list a home in 2022 is approaching quickly. The week of April 10-16 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year.
This selection comes from looking at seasonal trends from 2018-2019 and 2021 data. Due to the onset of the pandemic, 2020 was an uncharacteristic year and has therefore been excluded from the analysis. We expect the 2022 housing market to behave similarly to 2021 and pre-pandemic years. Each week was scored based on favorability toward sellers — this included competition from other sellers (active listings and new listings), listing prices, market pace (days on market), likelihood of price reductions, and homebuyer demand (views per property on Realtor.com). Percentile levels for each week were calculated along each metric , and were then averaged together across metrics to determine a Best Time to List score for each week. Rankings for each week were based on these Best Time to List scores.
2021 was a historic year in housing, with record high prices and record low inventory nationwide. Despite these extremes, when looking at the pattern each metric followed, 2021 tended to align with pre-pandemic years. With the inventory shortage, it has certainly been a seller’s market so far this year. However, some emerging trends hint at a possible shift in this dynamic, where sellers could potentially lose some leverage as demand from buyers cools slightly in response to rising mortgage rates, and supply increases as builders continue to accelerate production. Getting a head start in front of other sellers may pay off 2022.
Benefits of Listing April 10-16, 2022
At a national level, this week represents a balanced selection of market conditions that favor sellers.
Above average prices – Homes during this week have historically reached prices 1.4% higher than the average week throughout the year, and are typically 10.3% higher than the start of the year. If 2022 follows the typical seasonal trend, the national median listing price could reach $5,000 above the average week, and $39,000 more than the start of the year.
Above average buyer demand – The number of buyers looking at a listing can determine how many offers a home gets and how quickly it sells. The more buyers looking at a home, the better for the seller. This week in 2021 got 29.0% more views per listing than the average week throughout the year.
Fast market pace – Thanks to above average demand, homes sell more quickly during this week. Historically, homes actively for sale during this week sold 13.2% faster than the average week. In the fast-moving 2021 market, this week saw homes typically on the market for 40 days, 6 days faster than the year’s average, and 27 days faster than was typical in 2019.
Lower competition from other sellers – A typical inventory trend would mean 6.2% fewer sellers on the market during this week compared to the average week throughout the year. Due to overall inventory scarcity, this week saw 12.9% fewer sellers on the market than the 2021 average, and 20.4% fewer than the first week of the year.
Fewer price reductions – A typical trend would mean 13.8% fewer price reductions during this week compared to the average week throughout the year. Notably, price reductions increase as listing prices increase later in the year. For instance, by early May in 2021, the number of homes with a reduced listing price climbed by 17.8% from the start of the year, while prices were up 12.0% over the start of the year.
Market Dynamics Shift – You won’t find a more receptive market
With seemingly unlimited sustained demand and very little inventory of homes available for sale this year, stemming in part from a decade-long shortage of new construction, sellers’ positions seem to continue improving. But there are some ongoing shifts and potential changes in the market that are worthy of noting.
Mortgage rates are expected to continue rising. Late December 2021 saw mortgage rates at 3.05% and starting to climb. As of February 2022, rates hit 3.69%, almost 100 basis points higher than the 2.65% rate seen in January 2021. As rates rise, more buyers may begin to bow out of the market or curtail their home purchase price as they grapple with higher monthly costs. Either way, buyer demand is likely to cool and buyers will have to be more conservative in the bids they’re putting on homes.
Risk management — demand is high until supply catches up. 2021 saw the highest rates of home construction in the last decade-plus. Though the gap between home constructions and household formations grew in 2021, we expect to see optimistic builders continue to accelerate home building, potentially better meeting moderating demand as supply increases and homebuyers have more options. This trend may be beneficial for sellers hoping to buy, however. Despite slightly lessened demand, sellers will find more options for buying themselves, enabling them to enter the market without risking selling before securing a home for purchase.
Prices tend to peak later, as does competition. Likewise, sellers should consider that peak prices later in the season also come with greater competition from other sellers for a similar-sized pool of buyers. Historically, by the end of May, while prices reached near-peak levels (+12.2%) compared to the start of the year, new sellers also surged, increasing to nearly 1.5 times higher than at the start of the year (+48.4%). More sellers mean more options for buyers and therefore more competition among sellers. Sellers can mitigate that risk by being an early entry into the market, raising their already high odds of a successful close and likely negotiating favorable terms.
What does this mean for home buyers?
For buyers who have had to contend with extensive competition, soaring home prices, and climbing mortgage rates, there is a key takeaway: the usual seasonal dynamics of the housing market, builder sentiment, and seller sentiment suggest that it’s going to get better. We don’t expect inventory to be plentiful, but as more sellers come to the housing market, we expect there to be fewer buyers checking out and competing for each specific home. Seller sentiment remains above pre-pandemic levels, boosted by an increase in February.
Historically, the number of views per listing has cooled in the late summer/early fall and tends to improve for buyers from that point forward. Additionally, by mid-August, the number of sellers with actively-listed homes increased 17.4% over the beginning of the year, which means more options for buyers. Thus, buyers who can persist in their home searches are likely to catch a bit of a break in the sense that they can expect some more options to choose from in the weeks ahead. As mortgage rates rise and potentially decrease budgets, some buyers may drop out of the market, increasing options for those who remain.
More information and source: Realtor.com
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