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Buy Now or Rent Longer? 5 Questions to Answer
Before Purchasing Your First Home
Deciding whether to jump into the housing market or rent instead is rarely an easy decision – especially if you’re a first-time homebuyer. But in today’s whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership.
A real estate boom during the pandemic pushed home prices to an all-time high.1 Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down.
But is renting a better alternative? Rents have also soared along with inflation – and are likely to continue climbing due to a persistent housing shortage.2 And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future.
So, what's the better choice for you? There’s a lot to consider when it comes to buying versus renting. Luckily, you don’t have to do it alone. Reach out to schedule a free consultation and we'll help walk you through your options. You may also find it helpful to ask yourself the following questions:
You'll get the most financial benefit from a home purchase if you own the property for at least five years.3 If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.
There are costs associated with buying and selling a home, and it may take time for the property’s value to rise enough to offset those expenditures.
Even though housing markets can shift from one year to the next, you’ll typically find that a home’s value will ride out a market’s ups and downs and appreciate with time.4 The longer you own a property, the more you are likely to benefit from its appreciation.
Once you’ve found a community that you’d like to stay in for several years, then buying over renting can really pay off. You’ll not only benefit from appreciation, but you’ll also build equity as you pay down your mortgage – and you’ll have more security and stability overall.
Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow.
If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area.
One helpful tool for evaluating your options is a neighborhood’s price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent.5 Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term.
According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing home 10 years ago would have gained roughly $225,000 in equity — all while maintaining a steady mortgage payment.6
In contrast, someone who chose to rent for the past 10 years would have not only missed out on those equity gains, but they would have also seen U.S. rental prices increase by around 66%.7
So even if renting seems like a better bargain today, buying could be the better long-term financial play.
Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is the better value in your particular neighborhood.
If you determine that buying a home is the better value, you’ll want to evaluate your financial readiness.
Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that’s a sign you may be better off waiting until you’ve built a larger rainy-day fund.
Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won’t be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs.
Still, you could find that the monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it’s not always the cheaper option.
Plus, even though you’ll be in charge of financing your home’s upkeep if you buy, you’ll also be the one who stands to benefit from the fruits of your investment. Every major upgrade, for example, not only makes your home a nicer place to live; it also helps boost your home's market value.
If you want to buy a home but aren’t sure you can afford it, give us a call to discuss your goals and budget. We can give you a realistic assessment of your options and help you determine if your homeownership dreams are within reach.
If you’re prepared to handle the costs of homeownership, you’ll next want to look into how likely you are to get approved for a mortgage.
Every lender will have its own criteria. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment.
For example, lenders like to see evidence that your income is stable and predictable. So if you’re self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren’t at risk of becoming financially overextended.
In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate.
Whatever your circumstances, it’s always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you’re interested, and we’ll give you a referral to a loan officer or mortgage broker who can help.
Want to learn more about applying for a mortgage? Reach out to request a copy of our report: “8 Strategies to Secure a Lower Mortgage Rate”
Before you begin the preapproval process, however, it’s important to consider how homeownership would affect your life, aside from the long-term financial gains.
In general, you should be prepared to invest more time and energy in owning a home than you do renting one. There can be a fair amount of upkeep involved, especially if you buy a fixer-upper or overcommit yourself to a lot of DIY projects. If you’ve only lived in an apartment, for example, you could be surprised by the amount of time you spend maintaining a lawn.
On the other hand, you might relish the chance to tinker in your very own garden, make HGTV-inspired improvements, or play with your dog in a big backyard. Or, if you’re more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners.
The great thing about owning a home is that you can generally do what you want with it – even if that means painting your walls fiesta red one month and eggplant purple the next.
The choice – like the home – is all yours.
HAVE MORE QUESTIONS? WE’VE GOT ANSWERS
The decision to buy or rent a home is among the most consequential you will make in your lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don't hesitate to reach out for a personalized consultation, regardless of where you are in your deliberations. We'd be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals.
The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.
The residential rental market is now the fastest-growing segment of the housing market. In the United States, the demand for single-family rentals, defined as either detached homes or townhouses, has risen 30 percent in the past three years.1 And in Canada, rental units now account for nearly one-third of the country’s homes, with particular demand for multi-family units, including apartments and condominiums.2
At the same time, the short-term, or vacation, rental market is also booming. The popularity of online marketplaces like Airbnb, HomeAway, and VRBO has helped the short-term rental market become one of the fastest-growing segments in the travel industry.3
Now, more than ever, there is an abundance of opportunity for real estate investors. But which path is best: leasing your property to a long-term tenant, or renting your property to travelers on a short-term basis?
In this post, we examine the differences between the two investment strategies and the benefits and limitations of each category.
WHY INVEST IN A RENTAL PROPERTY? The Top 5 Reasons
Before we delve into the differences between long-term and short-term rentals, let’s answer the question: “Why invest in a rental property at all?”
There are five key reasons investors choose to real estate over other investment vehicles:
Appreciation is the increase in your property’s value over time. And history has proven that over an extended period, the cost of real estate continues to rise. Recessions may still occur, but in the vast majority of markets, the value of real estate does grow over the long term.
One of the key benefits of investing in real estate is the ability to generate steady cash flow. Rental income can be used to pay the mortgage and taxes on your investment property, as well as regular maintenance and repairs. If appropriately priced in a solid rental market, there may even be a little extra cash each month to help with your living expenses or to grow your savings.
Even if you only take in enough rent to cover your expenses, a rental property purchase will pay for itself over time. As you pay down the mortgage every month with your rental income, your equity will continue to increase until you own the property free and clear … leaving you with residual cash flow for years to come.
Inflation is the rate at which the general cost of goods and services rises. That means as inflation rises, the money you have sitting in a savings account will buy less tomorrow than it will today. On the other hand, the price of real estate typically matches (or often exceeds) the rate of inflation. To hedge or guard yourself against inflation, real estate can be a smart investment choice.
LONG-TERM (TRADITIONAL) RENTAL MARKET
When most people think of owning a rental property, they imagine buying a home and renting it out to tenants to use as their primary residence. Traditionally, investors would use their rental property to generate an additional stream of income while benefiting from the property’s long-term appreciation in value.
In fact, that steady and predictable monthly cash flow is one of the key advantages of owning a long-term rental. And as an owner, you don’t usually have to worry about paying the utility bills or furnishing the property—both of which are typically covered by the tenant. Add to this the fact that traditional tenants translate into less time and effort spent on day-to-day property management, and long-term rentals are an attractive option for many investors.
However, there are also limitations to long-term rentals, which often come down to your ability to control the property. Perhaps the most obvious one is that you do not get to use the home or closely monitor its upkeep (this is different from a short-term rental, which we’ll share in the next section).
In addition, while you can usually generate a steady, predictable income stream with a long-term rental, you are limited in your ability to adjust rent prices based on increasing or seasonal demand. Therefore, you may end up with a lower overall return on your investment. In fact, according to data from Mashvisor, in the 10 hottest real estate markets, short-term rentals produced “significantly higher rental income” than long-term rentals.4
SHORT-TERM (VACATION) RENTAL MARKET
Short-term rentals are often referred to as vacation rentals, as more and more travelers enjoy the benefits of staying in a home while on vacation. In fact, according to Wells Fargo, vacation rentals are steadily growing and predicted to account for 21% of the worldwide accommodations market by 2020.5
Investing in a short-term rental or funding your second-home purchase by renting it out can offer many benefits. If you purchase an investment property in a top travel destination or vacation spot, you can expect steady demand from travelers while taking advantage of any non-rented periods to enjoy the home yourself. In addition to greater control over how your property is used, you can also adjust your rental price around peak travel demand to maximize your returns.
But short-term rentals also have risks and drawbacks that may dissuade some investors. They require greater day-to-day property management, and owners are typically responsible for furnishing the property, upkeep, and utilities.
And while rental revenue can be higher, it can also be less predictable based on seasonal or consumer travel trends. For example, a lack of snowfall during ski season could mean fewer bookings and lower rental revenue that year.
In addition, laws and limitations on short-term rentals can vary by region. And in some areas, the regulations are in flux as residents and government officials adapt to a new surge in short-term rentals. So make sure you understand any existing or proposed restrictions on rentals in the area where you want to invest.
Urban centers or suburban communities may be more resistant to short-term renters, thus more likely to pass future limitations on use. To lower your risk, you may want to consider properties in resort communities that are accustomed to travelers. We can help you assess the current regulations on short-term rentals in our area. Or if you’re interested in investing in another market, we can refer you to a local agent who can help.
WHICH INVESTMENT STRATEGY IS RIGHT FOR YOU?
Now that you understand these two real estate investment options, how do you pick the right one for you? It’s helpful to start by clarifying your investment goals.
If your goal is to generate steady, predictable income with less time and effort spent on property management, then a long-term rental may be your best option. Also, if you prefer a less-risky investment with more reliable (but possibly lower) returns, then you may be more comfortable with a long-term rental.
On the other hand, if your goal is to purchase a vacation or second home that you’ll use, and you want to defray some (or all) of the expense, then a short-term rental may be a good option for you. Similarly, if you’re open to taking on more risk and revenue volatility for the possibility of greater investment returns, then a short-term rental may better suit your spirit as an investor.
But sometimes the decision isn’t always so clear-cut. If your goal is to purchase a future retirement home now to hedge against inflation, rising real estate prices, and interest rates, then both long- and short-term rentals could be suitable options. In this case, you’ll want to consider other factors like location, market demand, property type, and your risk tolerance.
HERE OR ELSEWHERE … WE CAN HELP
If you’re looking to make a real estate investment—whether it’s a primary residence, investment property, vacation home, or future retirement home—give us a call. We’ll help you determine the best course of action and share insights and resources to help you make an informed decision. And if your plans include buying outside of our area, we can refer you to a local agent who can help. Contact us to schedule a free consultation!
The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.
SEPTEMBER 14, 2022
The Best Week offers a balanced mix of market conditions that favor buyers.
The 2022 homebuying season has realigned with pre-pandemic seasonal patterns, and a shifting market offers buyers more flexibility than recent years, depending on their priorities.
Nationally, the best time to buy a home is the week of September 25 – October 1.
Though it is not back to pre-pandemic levels, active listing inventory has recovered significantly both year-over-year and compared to the beginning of the year so far in 2022. Adjusting for both the seasonal and 2022-specific market shift, the last week in September may see up to 46% more active listings than this year’s average so far. Buyers are poised to save over $20,000 during this week compared to the summer peak for a median priced home of $450,000.
Buying after the peak week may net a buyer more savings, but buying earlier is likely to mean more fresh options to choose from. Thinking about your priorities as a buyer can help you decide when to start shopping
Since the start of the pandemic, homes have been in high demand leading to intense competition, rapidly depleting inventory, soaring prices and a breakneck market pace. Buyers flocked to areas that offered spacious homes, desirable outdoor amenities and more bang for their buck. Over the last year, the median US home price climbed 16.9% year-over-year to a record-high $450,000 in June, and rental prices offered no relief, setting new records nationwide. High prices, climbing mortgage rates and inflation reaching near-historic levels put a dent in potential buyers’ pocketbooks. As a result, the market finally started to show signs of returning to balance and in May 2022, inventory started the trek towards recovery, growing compared to the previous year for the first time since June 2019.
The last few months have signaled that relief may be on the horizon for buyers, especially as the season quickly approaches the best time to buy — the time of year when the balance of market conditions tends to favor buyers the most. According to our analysis of Realtor.com listing data since 2018, the best time to buy a home this year will be the week of September 25th – October 1st.
With all of the challenges facing buyers as the housing market continues its journey to a healthy condition, this week boasts the culmination of market factors that favor buying over every other week of the year.
Is the housing market back to normal?
In a ‘typical’ (pre-pandemic) year, early-fall brings near-peak inventory, waning demand, a slower market pace, below-peak prices, still considerable new listings, and more homes seeing reduced prices. Last year, the 2021 homebuying season largely behaved like a pre-pandemic year, albeit with higher prices, higher demand and much less inventory. The beginning of 2022 continued the intensity of 2021 but also added in climbing mortgage rates. In May 2022, the number of homes for sale increased over the previous year for the first time since June 2019. This development signaled a turning point in the market that continued to play out in the following months. As buying continued to get more expensive, some buyers chose to put off a home purchase for the time being, which allowed for inventory to begin its recovery. Despite an increase in inventory and a decrease in demand, prices continued to climb through June before finally leveling off in July as price growth year-over-year slowed.
As summer faded, inventory grew, price growth slowed, time on market started to level off, and price reductions climbed, indicating that this year’s homebuying will follow a more typical pattern that may be stronger than usual given the cyclical rebalancing that is also occurring. However, buyers continue to feel the effect of uncertain economic conditions. Potential buyers will face the affordability challenges that have made way for the recent real estate refresh. Despite this, the typical seasonal trend coupled with the already cooling market will play in the favor of persistent, informed buyers who are ready to purchase.
The Year So Far
Up until the last couple months, 2022 continued to crank it up a notch with record-high listing prices and a blistering pace of home sale. However, as of August, the national median time on market for a home was 42 days, slowing from 37 days last year and this year’s peak speed of 31 days in May. After a whirlwind couple of years, time on market has started to level off and even slow compared to last year. However, inventory has kept up the pace in affordable areas, such as many of this year’s hottest zip codes, where the typical home sells within a little over a week of going on the market.
Extreme inventory shortages carried over from 2021 and continued through the start of the year, forcing buyers to scramble during their home search. At its lowest point, housing inventory was down 29.1% compared to last year and down more than 65% compared to 2019. As inflation concerns mounted, the Fed raised interest rates, and mortgage rates climbed. The continued high prices combined with elevated mortgage rates took a toll on buyers’ budgets, leading to fewer buyers which freed up inventory at the same time that more homeowners decided to list homes for sale this spring. By the end of August, active listings were up 87.3% compared to the start of the year. Moreover, despite falling below year-ago levels in summer, new listings continue to enter the market, with over 100,000 new listings every week since late February.
As discussed above, the major factor keeping inventory high is the mortgage rate trend. Last year, buyers were able to keep up with rising prices by taking advantage of low mortgage rates. Now that rates have climbed, reaching more than 200 basis points higher than the previous year since late April, some buyers are no longer able to keep up. As a result, fewer buyers in the market means more active inventory. On the other hand, many sellers fear they have missed out on the peak, leading to a recent decline in new listings as some sellers hold off to see how the market will settle.
Why the End of September?
Nationally, the best time to buy in 2022 is the week of September 25-October 1. This week historically has shown the best balance of market conditions that favor buyers. Inventory tends to be high, prices are below peak levels, demand is waning, and pace of the market slows to a more manageable speed.
This seasonal slowdown is partly driven by school schedules and weather patterns. Housing market activity begins in earnest in spring and peaks in summer as families hoping to move while kids are out of class look to close on a home with enough time to settle in before the back to school rush. This critical mass of families prioritizing home search decisions around school districts and the school calendar combined with warmer weather that makes home showings and inspections easier to conduct and foliage that enhance the curb appeal of many homes leads to a predictable surge in activity. Then as the year transitions to fall and more families bow out due to the school schedule, demand wanes, and prices dip to post-peak levels as leftover inventory stays on the market.
Early fall is generally the sweet spot for buyers who can capitalize on that confluence of factors to have a wider variety of options at a more reasonable price.
During the best week, buyers can expect listings to rise beyond what they’ve been seeing so far this year. Historically, inventory peaks in early fall. This year, inventory will likely continue to be strong through the best week to buy. The typical seasonal trend expects this week to have 9.5% more active listings than the average week, and 12.9% more than the start of the year. However, 2022 is an outlier compared to past years as it brought about a sizable shift in the market as buyer demand cooled in response to higher mortgage rates. Adjusting for this shift suggests that the last week in September may see up to 46% more active listings than this year’s average so far. If this trend holds, we can expect to see around 780,000 listings on the market during the best week, which is roughly 400,000 more active listings nationwide than the lowest point this year, in late February.
Less Competition From Other Buyers
Home buyers shopping during the best week should expect less competition from other buyers. Pre-pandemic, July was typically the peak for homebuyer demand, as measured by views per property on Realtor.com. The 2021 housing market shifted the peak earlier into the spring, with continued high demand in the summer, as buyers hustled to beat rising prices and mortgage rates. The spring and summer tend to have the highest concentration of shoppers looking at each home for sale, which translates to more competition for buyers looking to lock down a home. Historically, during the Best Week to Buy, demand is 26.9% lower than the peak, and 8.5% lower than the average week, and the advantage for home shoppers is likely to be at least as good this year as high prices and mortgage rates continue to reduce buyer purchasing power.
A More Manageable Market Pace
Another challenging aspect of homebuying, especially in 2021 and into 2022, is the pace of the market, or how long it takes homes to sell. This year saw time on market build on last year’s already blistering pace all the way up until August. This means buyers continue to feel pressure to potentially buy a home sight unseen, or make more concessions to close a deal before more competition can chime in.
The best week should offer some relief to those who need a bit more time to make their decision. The best week historically slowed by 21.1% compared to the peak pace earlier in the year. With a peak market pace of just 31 days in May, based on seasonal trends and a cooling market, the Best Week is expected to add about a week to the amount of time a typical home spent on market so far this year, and more than two weeks more time on market than the peak this May.
Lower Post-Peak Home Prices
As the market has continued to cool, prices have been surprisingly sticky, continuing to climb year-on-year, though slowing the pace of growth. At a national level, prices typically dip 2.1% compared to the typical season high during this week. However, prices have been falling more quickly than a typical year since July. Adjusting for this year’s trends, buyers shopping during the best week could save close to $20,000 compared to the year’s peak. And in several of the largest housing markets around the country, home prices during the best week can dip over 10% lower than their peak price earlier in the year, potentially saving buyers tens of thousands of dollars.
More Price Reductions
The best week also represents one of the peak weeks for price reductions throughout the year, with an average of 5.2% of homes seeing price reductions that week, historically. Due to the recent shift in the market, however, 2022 is seeing price reductions return to pre-pandemic levels, suggesting the Best Week may see more than 6.0% of homes with reduced prices. Nationally, this could mean roughly 48,000 homes seeing price reductions this week, based on inventory estimates. This weekly price reduction rate would translate to a monthly price reduced share of about 24.8%. This peak is historically driven by a combination of buyers leaving the market, which brings down demand, in addition to a build up of inventory throughout the year. This year, the number of buyers leaving the market is much higher than in the past few years, meaning even more sellers may reduce their home price to draw buyer attention.
Though new homes continue to enter the market, they add to the already-increasing back-stock of homes that haven’t yet sold at that point in the year. This means more competition among sellers for the dwindling number of buyers, which leads to price reductions for sellers hoping to sell before year-end. Importantly, many sellers are buyers themselves, nearly three-quarters according to a recent survey, and are motivated by many of the similar seasonal milestones like the school calendar.
The Potential for More Fresh Listings
In addition to active inventory on the market, the addition of fresh listings entering the market tends to give buyers more options even into the fall. The best week historically has added 4.2% more listings than the average week and 24.5% more than the start of the year, however this is another metric that may not behave in typical fashion in 2022. According to the most recent Realtor.com data, the first half of 2022 far surpassed this expectation. As sellers increasingly took the opportunity to cash in on the red hot market, new listings nearly doubled over the beginning of the year by mid-June. However, as affordability challenges have ushered in a cooling market, waning seller enthusiasm led to a drop off in new listings in August. Even so, the number of fresh listings coming on the market has exceeded 100,000 new listings to the market for the last 6 months.
This recent trend is signaling a decline in new listings through the latter half of the year as sellers perceive a tempering market, though the Best Week will still offer buyers considerable new options.
Finding the Best Time to Buy
Price and availability (i.e. inventory) tend to be highlights of things a buyer will keep in mind during their home search. Are there homes they want and can afford?
But there are a few other metrics that they may not be aware of that we at Realtor.com have insight into. Things like competition from other buyers, the pace of the market, and the number of price reductions in the area. All factors that play a part in locking down the right home at the right time.
To determine the best time to buy, we examine multiple housing market metrics. These include: 1) listing prices, 2) inventory levels, 3) new “fresh” listings, 4) time on market, 5) homebuyer demand (realtor.com listing views), and 6) price reductions.
We score each week of the year from 0-100 based on the number of active listings. A given week will score highly if it has more listings compared to other weeks of the year. We score the other metrics in the same way, so each week has six different scores for active listings, new listings, listing prices, days on market, price reductions, and views per property. (In the case of prices, lower prices score higher. Same with views per property).
We then rank each week by the average of those scores. The week with the highest overall score is the best time to buy. This week represents a balanced view of market conditions favorable for buyers.
Plan for Your Priorities
It’s no secret that climbing mortgage rates have made homebuying more challenging, even as price growth has slowed. Mortgage rates have been on a rollercoaster over the past few months as interest rate hikes and inflation data battle it out with a strong job market and healthy consumer spending. As a result, there is a fairly wide margin of error around any mortgage rate predictions for the rest of the year. What we do know is the Federal Reserve is committed to bringing inflation down to a healthy level (2%), so will likely continue the tightening cycle of raising interest rates, keeping upward pressure on mortgage rates.
How should this factor into your homebuying decision? Knowing your priorities can help you navigate any uncertainty. The best time to buy optimizes a variety of factors to choose the best overall week to buy a home. However, if price is your chief priority or if you’re laser-focused on having the largest number of fresh home options, your best time to buy may be slightly earlier or later.
If low home prices are your chief priority, consider waiting until a bit later into the fall, as home prices tend to come down as the holidays approach. In this case, keep an eye on mortgage rates to be sure your patience pays off and higher mortgage rates don’t sabotage your plan for a lower monthly payment. You might consider rate-proofing your home purchase budget by using a mortgage calculator like you’ll find on Realtor.com to consider what changes in the mortgage rate mean for your monthly housing costs, so you’re not surprised.
If instead you are looking to have the maximum number of options, consider buying a bit earlier as new and active listings tend to peak a bit earlier in the fall. Early buyers are likely to have the highest number of fresh homes to choose from, maximizing their potential to find just what they’re looking for, even if they pay a slight premium for buying a bit earlier.
No matter your priority, get to know your local market by spending time looking at your desired area on Realtor.com and setting up price alerts so you are notified of every home that fits your criteria when it hits the market. And keep in mind that homebuying is a journey.
Local Market Sweet Spots
Although nationally the best time to buy is the week of September 25 – October 1, some of the largest housing markets in the country have their local best time just around the corner.
The week of September 11-17 is the best time to buy for New York, Los Angeles, Chicago, Seattle and Minneapolis metropolitan areas, among others.
Housing Markets Where the Best Time to Buy is Sept 11-17
Within the 50 largest metros, markets where the best time to buy in September 11-17 made up 12.7% of the national inventory in August. Among those markets, the week of September 11-17 has historically had an average of 15.7% more listings on the market over the typical week of the year. Competition with other buyers, as measured by views per property, has historically been down 10.9% in these markets, and this year’s trend will likely see an even larger drop in demand. The time on market has been up 42.4% over the year’s fastest pace in the past. On average, listing prices are 5.6% lower during this week compared to the peak prices in these areas at other times of the year. New listings in these areas are typically up 3.4% compared to the average week.
Each of these strike a different balance of market factors during this week as it relates to buyers.
In Seattle, the week of September 11-17 typically has 32.0% more active listings than the average week in the year. In tandem with higher inventory is lower demand, with views per property down 17.3% during this week compared to the peak earlier in the year. That means significantly less competition from other homebuyers compared to the average week. The added inventory spreads buyers out and eases the intense competition per home.
In New York and Los Angeles, homes on the market during this time take 30.3% longer to sell, on average, compared to their respective seasonal peaks when homes sell fastest. Buyers who feel intimidated or frustrated by the blistering pace of sales earlier this year may find the market more approachable as autumn approaches.
Across these markets, listing prices have been 5.6% below their seasonal peaks, on average. Minneapolis sees the biggest drops, 9.9% below peak prices. With the peak price in Minneapolis reaching $422,000 in May, that would translate to a savings of $41,800 during the best week.
Realtor.com analyzed six supply and demand metrics at a national and metropolitan level that follow seasonal patterns, using data for 2018-2021 period (2020 data was omitted due to anomalies caused by the pandemic). Those metrics analyzed include: 1) listing prices, 2) inventory levels, 3) new “fresh” listings, 4) time on market, 5) homebuyer demand (realtor.com views per property) and 6) price reductions. Interest rates, which do not follow seasonal patterns, were not included. To account for 2022 market conditions, estimates reflect typical seasonal patterns layered on top of the most recent 2022 weekly data.
Each week of the year was scored from 0 to 100 based on the number of active listings. A given week scored highly if it had more listings compared to other weeks of the year. The other metrics were scored in the same way, such that each week had six different scores for active listings, new listings, listing prices, days on market, price reductions, and views per property. (In the case of prices, lower prices score higher. Same with views per property).
Each week was then ranked by the average of those scores. The week with the highest composite score was considered the best time to buy. This week represents a balanced view of market conditions favorable for buyers.
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For more details, pictures and price click the link to the listing: https://www.careteamproperties.com/search/details/1gz/0/
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Did you know that June is National Homeowners Month?! 🏡 🥳 To celebrate our homeowners, check out these #HomeownerHacks to help you make the most of the place you call home with a June Home Maintenance Checklist. ✅ Clean out gutters and downspouts.
✅ Power wash driveway and sidewalks.
✅ Clean and repair outdoor play equipment.
✅ Check the A/C and schedule maintenance if needed.
✅ Prep the grill for summer barbecuing.
✅ Clean the dryer vent and exhaust duct.
✅ Wash, fold, and organize pool and beach towels.
✅ Organize and store school supplies and papers.
✅ Replace air filters.
✅ Dust ceiling fan blades and set to spin counterclockwise.