December in residential real estate is typically the quietest month of the year. It’s more of a time for family, friends and football than searching, stressing and selling.
Of course, 2020 has not been your typical year and there are strong signals that show no seasonal slowdown in real estate. If anything, residential sales could simply continue at a late-fall or late-winter pace and skip over the usual December-January hibernation.
Even with new Covid-related restrictions and increased economic strains amid more job redundancies, real estate is moving forward and buyers are eager to grab almost any home to hit the market. In a year of frenzied activity and bare-cupboard inventory, right now may be the best time to sell.
First a look at some numbers. Using Seattle as a benchmark, the city averages 1118 new home listings a month across a 12-month period. In the past 5 years, however, the city averages 368 new listings in December and sells 804 (a higher number, thanks to a backlog of homes for sale). It has been 10 years – at the end of the housing crisis – since Seattle has had more than 500 new listings in a December.
Winter home sales activity has improved over the past few years, boosted by the increase in overall buyers – not necessarily an increase in sellers.
Total available single-family homes on the market are lowest in December almost every year (except 2018). This chart shows sharp declines for Decembers in 2015-2017 and again for the final month of 2019. Through this October, the chart line is heading in the downward direction and will likely rest below 1.0 month of inventory by year’s end.
The incentives to sell now rather than wait until spring are compelling.
Supply and demand – In competition with few sellers in a year already short of home inventory, owners can name their price (within reason, of course). Research shows that more than half of buyers don’t have children at home and are not beholden to school calendars. If they are looking in December, buyers are truly seeking to make a purchase and can be quite motivated – thanks in part to incredibly low mortgage interest rates. There are no looky-loos or curious neighbors touring homes this time of year. The demand is palpable.
Negotiation leverage – In most scenarios, sellers can generally call the shots when negotiating with buyers. The shortage of homes gives sellers the upper hand. Is your buyer seeking a home inspection? Okay, but sellers are not obligated to agree to costly repairs. Buyers seeking their dream home will usually back down from pricey requests for repairs just to complete a deal.
More free time to shop – Tis the season to shop – for a new home, that is! People tend to enjoy the holiday time by shopping in stores and taking a well-deserved break from the daily grind. With more people shopping online for holiday gifts, there is additional time to prepare a seller’s home for the market – decluttering, hiring contractors to make repairs or painting a room. At the same time, it gives sellers the opportunity to glimpse at homes on the market and visit properties during December’s vacation time – selling and buying around the same timeframe.
Bigger spotlight on newer listings – It’s a fact that we real estate brokers tend to gravitate to the newer listed homes and share them with buyers. With so few listings, sellers tend to receive more attention from more agents and buyers. And more eyeballs can mean more competition for the home. In other words, sellers could be busy having their agent show the home in person or virtually until an offer is accepted. (The home can be shown safely by following health protocols.)
My message to homeowners on the fence: Get a head start on the 2021 housing season by selling now and moving out after the holidays.
Now or in the future, please contact me for more details about having a Realtor® market your home to the greatest number of potential buyers at the highest possible price in the shortest amount of time and at the most favorable terms. I’m here to help.