To many, March Madness means basketball. In real estate, March Madness is the mad scramble for sellers to put their houses on the market and for buyers to come out in force to start their search. But what does the data say? Is Spring really the best time to list your house so it sells quickly and for top dollar?
The “Magic Window” for Listing Your Home
In Zillow Talk: The New Rules of Real Estate, Zillow recently analyzed supply, demand and seller outcomes in order to determine the magic window to list a home. Drumroll, please …..the magic window is mid-March to mid-April. According to Zillow, “houses sold in this magic window sold 13-22% faster and for 2-6% more. That translates into thousands or even tens of thousands of extra dollars, depending on your sales price. And a lot less time on the market means less stress of keeping your house show-ready.
What Does Your Weather Have to Do with It?
Where your house is located and the weather in your city affects exactly where in that “magic window” you should list your home. Areas with warmer average temperatures can be listed earlier in the Spring whereas colder cities (think Boston) should list later in that window. Cities with smaller temperature fluctuations or a wealth of sunny warm weather (think Arizona, Southern California or Florida) have longer ideal listing windows and less fluctuation between selling prices and listing duration from month to month. Which makes a lot of sense. Buyers like looking at houses when flowers are blooming, grass is green and the sun is out! Zillow even has a Best Time to List toolkit which takes into account your city, zip code, house style and other market data to pinpoint the optimal week to list your specific house.
More Inventory = Higher Prices??
It’s supply and demand 101. When supply is up, prices go down. It doesn’t play out that way in the Spring real estate market for several reasons, and sellers can actually get more for their houses even with a lot of competition. Why? There may be a greater supply of houses in Spring, but there are also more buyers which means relative supply is actually down compared to demand. Additionally, more activity means more comps, each often priced a little higher than the last in their neighborhood; these escalating comps support the creep up in prices during the Spring. In fact, the relative lack of comps in the winter can hold prices down.
Washington DC's "Magic Window" (Hint: It's a Big Window!)
Housing supply is still extremely low in the Washington DC area, including suburban Maryland and Virginia markets, averaging only a 1.8-month supply (as compared to a 3-month supply nationally and an ideal balanced supply of 6 months). Because demand exceeds supply for nearly all types of homes in the DC area, this lengthens the optimal window for listing and selling your home to nearly year-round. In fact, sales records over the past five years from the Greater Capital Area Association of Realtors confirm that in all months of 2016, houses sold for 98-100% of their sales price. Houses sold a little faster in the Spring months of March, April and May, with the median days on market of 9-14 days, versus 20 days in the slowest month of February. But the short number of median days of market throughout the year as well as the very high sales price make the Washington DC market very strong year round.
What Does This Mean for Fix and Flippers in Washington DC?
With housing stock still very low for the forseeable future and a strong sales cycle nearly every month of the year, Washington DC remains and excellent city to fix and flip homes. Brought to you by Walnut Street Finance, provider of hard money loans in the Washington DC area.