In a typical year, September is the best time to buy, after the rush of summer homebuyers has passed through the market and families are settling down for the school year. However, during 2020, a year of coronavirus upending all norms, widespread low inventory and skyrocketing demand from buyers who have been stir-crazy during quarantine has led to an unusual competitive fall homebuying season.
For the first time since 2016, homes sold in September faster than they did in August, according to realtor.com’s monthly housing report. The typical buyer is paying about $20,000 more for a house and facing 25 percent more competition than at the beginning of 2020.
“Many buyers tend to put their home search on hold after the start of the school year, but remote learning and the desire for more space continued to fuel buyer interest in September,” Danielle Hale, chief economist at realtor.com, said in a statement. “Unseasonably high buyer interest coupled with historically low inventory and favorable mortgage rates are creating a perfect storm in the housing market. While this is good news for anyone looking to sell their home, it has created tremendous competition among buyers.”
According to realtor.com’s analysis, the best time to buy a home in 2019 was September 22 through September 28. If 2020 had followed the same pattern, the best week to buy would have been September 20 through September 26.
However, 2020 has not followed suit. While there are typically 17 percent more homes available in September than at the start of the year, this year, listings are down 21 percent compared to the beginning of the year. Homes are selling 12 days faster than expected at a rate of 39 percent faster than at the start of the year (compared to the typical rate of 25 percent faster than the beginning of the year).
This September, the market has been flooded with buyers — in an average year, there are usually 9 percent more buyers in the market compared to the start of the year. This year, there are 25 percent more buyers in the market compared to the beginning of the year.
Nationwide, properties are seeing fewer days on market and increasing home prices relative to 2019.
Properties in the Northeast are selling most quickly compared to 2019, spending 13 fewer days on market. Properties in the South are selling 11 days faster, properties in the Midwest are selling 9 days faster and properties in the West are selling 7 days faster.
The Northeast has also seen the greatest average price acceleration at 12.8 percent over last year, followed by 10.9 percent in the Midwest, 8.6 percent in the West and 7.2 percent in the South. Metros experiencing the greatest year-over-year price growth include Cincinnati, Ohio-Kentucky-Indiana (up 16.9 percent); Boston-Cambridge-Newton, Massachusetts-New Hampshire (up 16.4 percent); and Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland (up 15.6 percent).
New listings in September were down 13.8 percent from last year, accelerating the year-over-year inventory decline of 11.8 percent seen in August.
The numbers from September give more credence to the idea that “fall is the new spring.” If these market trends continue, buyers may need to prepare for sustained competition through October.