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. In many cases, this is not correct.
Even more so this year, with the continuing effects of COVID-19, the demand for homes is still at a record high and the amount of inventory is at a record low. So, as soon as a home is put on the market, it will more likely than not be purchased quickly. To add to this, the market saw a 105% absorption rate in June, as more homes went under contract than the number of homes listed. This was caused by the supply chain log jam in March, April and May as mortgage companies, attorneys, appraisers, title companies, cities/town offices, and registries became overloaded due to the social restrictions put in place.
During normal times, for home sellers who list in the late summer and early fall, their home can stay on the market longer than anticipated because the inventory during that time is at a high point for the year. September and October are usually the months with a very high number of homes on the market, and then as those homes sell or people begin taking them off the market, inventory decreases. This year, it’s a much different story with abnormal levels of competition. As the this year progressed and the market slowly and slightly became less competitive for buyers, there was an unseasonable low but slight uptick in the number of price adjustments, which provided a bit of relief to the anemic market. Even with this bit of relief, we’re still seeing a highly competitive market that is expected to continue through the end of the year and beyond.
Take a second and think about the buyers. There is a large pool of buyers who want to buy before the end of the year but have not for the following reasons:
- They have had a hard time finding the right home, and realistically a home in general because homes are selling faster than ever
- They have found the home they want and likely ended up losing it to another bidder
- They found the home they wanted but it was overpriced so they didn’t buy it
These folks are still out there looking for a home and are eager and motivated to find a home by the end of the year. Mortgage rates are historically low which gives buyers more spending power and so buyers are very dedicated and are the most likely to make serious offers if they’re interested in your home.
Show Me the Facts
If you are skeptical, here are the stats from 2018 and 2019 at this time, along with this years. You can see in September 2018 (week 37) the inventory was high reaching 19,083 homes on the market. 2019’s fall spike occurred that week as well. Both years, inventory increased for a few more weeks before falling again through November and December. This year’s spike during the same time period seemed to still have some momentum and inventory continued to slowly grow through early October, but we’re seeing a decline once again.
Pending Sales Per Week Last Year
One of the many metrics we track on a weekly basis at Lamacchia Realty is the number of homes that are listed compared to the number of homes that go pending each week. It provides us and our clients with very telling data about how active the market is.
Throughout November and December 2019, there was a slight decrease in homes that went pending (UAG), but you may be surprised at how small that decrease is. In September and October 2019 an average of nearly 11.4% of the homes for sale went pending (under agreement) every week. Then in November and December, an average 10.04% of homes went pending. That is a decrease of only 1.36%! If we remove Thanksgiving week and the week between Christmas and New Year’s, the average goes up to 10.69% which brings the average even higher. This means that people are buying homes before and during the holidays!
This data shows homes for sale and pending in Massachusetts per week from August 31st to December 28th in 2019:
Pending Sales Per Week This Year
This year, September’s average amount of pending sales per week was 20.81% which is 9.2% higher than the exact same period in 2019 when it was 11.61%. With the whirlwind that 2020 has been, and the market going through never before seen delays, it’s no surprise at how high the average percentage of pending sales is. The consistently high level of buyers from March until now directly contributed to how quickly homes listed went under agreement. Bidding wars were rampant then and throughout the summer and are still happening now which directly relates to the high average of pending sales.
This graph shows homes for sale and pending in Massachusetts per week from August 29th to November 7th of this year:
The Buyers Still Looking in November and December Want a Home!
Year after year home buyers do in fact 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. Especially this year with the consistently low inventory levels, buyers will be out looking more than ever this holiday season.
Buyers want a home during the holiday months and there is no better gift than the keys to a new home. While the market has seen a slight release in pressure in the number of buyers, it’s still nowhere near where it needs to be for a more balanced market. But remember, this won’t last forever!