The Average Length of Time It Takes to Sell a House
Several variables determine average time on the market.
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Asking how long it takes to sell a house is asking for an absolute in a universe of variables. There’s always the house that sells in three days and the one that sits on the market for years -- the average swings back and forth, never quite reaching one or the other.
A market may be a geographic area or a category of housing in an area. Real estate professionals consider a market where homes sell within six months of listing as “balanced” or “neutral,” meaning that enough homeowners are selling and customers buying that neither has an advantage. Toss in a variable such as a major employer entering -- or leaving -- the area and the scale can tip toward sellers to make a fast market or toward buyers to create a slow market. The average time in a fast market might be 30 days and the average time in a slow market could be nine months.
People who have to pack up and move typically would rather do so in decent weather, so it may take longer to sell a home just before winter or a rainy season. Families tend to prefer moving at the end of a school year or during summer break to minimize the upheaval in their childrens' education. All but the most devoted house shoppers -- or those with a deadline -- might avoid house hunting during the holidays. These and other seasonal considerations make spring and summer the seasons when average market time could be shorter than a neutral six-month period. They might also make fall and winter good times to go shopping, looking for motivated sellers whose homes have been on the market for longer than six months.
When interest rates are low and house prices are on the rise, buyers commit rather than browse and average time on the market decreases. Even if mortgage prices are moderately high, rising house prices can make for a seller’s market if housing is not plentiful. If, however, an oversupply of housing exists, interest rates are high and prices are steady, the average time might lengthen to as much as a year.
Market Absorption Rate
Barring such events as discovery of radon deposits or recognition of an area as a landmark district, the confluence of the market, the season and the economy determine the average length of time it takes to sell a house. Real estate professionals figure an approximate listing time by dividing the number of listings in a market by the number of accepted contracts in a period of time to find the “market absorption rate.” If 3,000 houses were listed in the last 180 days, and 1,700 had sold, for example, it ideally would take another 78 days for the rest to sell with an average market time of 129 days, or about 4.3 months. More houses will come on the market and sell during that time, of course, but the market absorption rate provides an approximate average.
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About the Author
An avid perennial gardener and old house owner, Laura Reynolds has had careers in teaching and juvenile justice. A retired municipal judgem Reynolds holds a degree in communications from Northern Illinois University. Her six children and stepchildren served as subjects of editorials during her tenure as a local newspaper editor.
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