From a Statistical Standpoint, is it Really More Lucrative to List a Home for Sale in the Spring?

Over the past decade, the Northern Virginia real estate market has followed a predictable trend:

January and February are always the slowest months in terms of homes sold. Home sales then pick up pace in the spring, hitting a peak in June. From July onward, home sales taper off as fall approaches, continuing a slow, steady decline through the end of the year. Then, the cycle begins again.

This is hardly breaking news. Common wisdom says it’s best to put your house on the market in the spring precisely because of this trend.

But is it really, from a statistical standpoint, more lucrative to sell in the Spring/Summer than the Fall/Winter? To answer that question, we have to look beyond the number of homes sold. In terms of getting the most money for your home at closing, the two most relevant statistics are:

  1. The average number of days your home sits on the market before selling
  2. The ratio of sale price to listing price.

Average days on market

The average number of days a home sits on the market before being sold has also followed a defined and reliable cycle over the past decade. Here’s the pattern:

    1. Homes sell quickest in the late spring/early summer
    2. The pace of home sales slows down through fall and into winter
    3. The pace of home sales picks back up again in early spring and accelerates into the summer.
    4. Homes sell quickest in the late spring/early summer
    5. Rinse and repeat.

Almost like clockwork, homes listed in late spring/early summer sell twice as quickly as homes listed late fall/winter. In terms of sale price, this won’t necessarily affect how much a home sells for. However, if there’s an existing mortgage on the home, and it takes 4 months rather than 2 months to sell, then the financial impact on the seller could make a difference. There can also be a tendency among sellers to reduce the price of a listing if it doesn’t sell quickly. While this isn’t reflected in the statistics, it can make a real difference in the price a home commands. This is more of an issue in a buyer’s market or a balanced market. We are in the midst of a strong seller’s market here in Northern Virginia, and as a result, the number of days a home spends on the market before sale will generally not have a significant impact on the final sales price.

Sale-to-List Ratio

Unlike the number of homes sold or average number of days on market, the trend of sale-to-list ratios (the average sale price divided by average list price) does not follow a well-defined pattern year after year.

Here are a few general statistics:

  • The highest ratios occurred from April-June in 7 out of the past 10 years.
  • The lowest ratios occurred in January-March in 7 of the past 10 years.
  • March, April and September have all had the highest ratio in one year, and the lowest ratio in another year.
  • The sale-to-list ratio varies 1.4% on average, for any given year.

The conclusions that can be drawn from these numbers are underwhelming. If you take the average variation in sale-to-list ratio (1.4%), and apply it to the actual impact on sale price, here’s what you get:

  • For a $500,000 home, the dollar difference would be $8,750.
  • For a $1,250,000 home, the dollar difference would be $26,250.

Conclusions

Overall, the numbers support the theory that listing a home for sale in the spring offers the best chance for getting full value. However, the actual dollar difference is generally minimal. Choosing the right time to sell is not a decision that can be made based on macro level data. To determine the best time to sell your home:

  1. Research how the micro-market your home resides in has performed recently, and what trends it is showing. There are certain micro-markets and price points where the time of year you list can make a difference in the closing price. There are other micro-markets, such as single family homes under $650,000 in North Arlington, that will sell quickly and for full value regardless of the time of year. This information is not readily available, but any good Realtor can pull it for you, and offer analysis on how it applies to your home.
  2. Consider other factors: Consider how the selling process will impact your work and your family. The time of year you choose to sell your home can often create unforeseen difficulties in these areas of your life. These difficulties can have a financial impact.

What to learn more?

If you have any questions about your home, or if you just can’t find the answers you’re looking for online, please feel free to reach out. I’d love to chat with you.

Lou

Lou Sagatov, Realtor®

571-305-2405

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