End of Year Expectations
Seven more weeks until the slowest season of the year starts, the Holiday Market.
Before the blink of an eye, everyone will be gathering for a day of gratitude, family, feasting, and football. That is correct, Thanksgiving is less than two months away. From there, it will be turkey leftovers, calendars filled with holiday parties, Amazon, UPS, and FedEx trucks will be parked in front of every door, and families will gather again and swap gifts with the ones they love. The holiday season is around the corner.
From now through the week before Thanksgiving, it is the LAST HURRAH before housing transitions from the Autumn Market to the Holiday Market, the slowest time of the year for real estate in terms of supply and demand. The holidays are filled with distractions. As a result, the hunt for a home takes a back seat for many buyers and fewer homeowners take advantage of selling their homes regardless of how incredibly hot the rest of the year will be for real estate. The overall speed of the market cools slightly, and the market time increases a little bit.
The supply of homes available to purchase will plunge as many unsuccessful sellers throw in the towel to enjoy the holidays and hold off until the Spring Market. It is hard to imagine that there are that many homeowners lingering on the market, unable to sell, given how hot housing is right now. Yet, there are 513 sellers today, 24% of the current active inventory, who have been exposed to the market for more than two months. Also, November and December are when the fewest number of homeowners opt to list their homes for sale during the year. The five-year average number of homes coming on the market from 2015 to 2019 (intentionally omitting 2020 due to the skew from COVID) for November is 2,275 homes, 46% less than the annual height in May of 4,177. In December it drops to 1,533 homes, 63% less than the height in May. With both sellers throwing in the towel and fewer homeowners coming on the market, the inventory plunges. From 2015 to 2019 the inventory dropped, on average, by 23% by year’s end.
Excerpt taken from an article by Steven Thomas.