A new study has found that the best time to buy a home this year is upon us due to a confluence of increased inventory and lower competition among buyers.
According to the study by Realtor.com Chief Economist Danielle Hale and Economic Research Analyst Nicolas Bedo, the 2021 housing market has mirrored pre-pandemic years and predicts a traditional cooling of the markets in October that favors buyers who will see 18% less competition compared to the yearly peak of the market in the summer.
Research found that the top-50 largest markets hit their sweet spot between September 12 and October 17, when buyers will see a 31% increase in the number of units available over an average week and an increase of 100,000 units nationwide.
Why is the first week of October the best to purchase a home? According to the report, “This week historically has shown the best balance of market conditions that favor buyers,” according to the study. 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 the school schedule. Typical housing market activity begins in earnest in spring and peaks in summer. 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.”
The increase in inventory also leads to homes being on the market for a longer period of time and possible price reductions. During the week of October 3 prices could dip 2.6% compared with the typical seasonal high. This means at median listing price of $385,000, buyers could save about $10,000. In addition, the first week of October is also the peak for price reductions with an average of 7% of homes dropping their price in this timeframe and remain on the market seven days longer.
“Another challenging aspect of homebuying, especially in 2021, is the pace of the market, or how long it takes homes to sell,” the study continued. “This year has seen homes selling at a quickening pace, with some of the hottest zip codes having an average time of sale of just a few days. This means buyers must 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 18% compared to the peak pace earlier in the year. With a median time on market of 37 days in June, by the time the best week comes around in October, that pace should slow down to 44 days, adding an additional week for buyers.”
While the best time to buy a home is October 3–9 nationally, some of the largest markets hit their sweet spot during the week of September 12–18: among them are the metropolitan areas of Boston, Denver, Detroit, Los Angeles, Minneapolis, New York City, and Portland.
Realtor.com scored cities in six categories for the study: listing prices, inventory levels, new “fresh” listings, time on market, homebuyer demand (Realtor.com views per property), and price reductions. The analysis used data from 2018 and 2019; data from 2020 was omitted due to the pandemic.