By Rob Jafek, Principal | Boomerang Capital Partners, LLC
Are you ready for May 27?
May 27 is the day to sell a house. THE DAY.
How was this determined? ATTOM combs through more than 155 million U.S. residential and commercial properties, covering 99 percent of the nation’s population, looking at property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data and then validates, standardizes, and enhances the real estate data. For this analysis, over 59 million single-family home and condo sales from 2011 to 2023 were analyzed. Researchers concluded that the first half of 2024, particularly May, February, and April, offers the highest premiums for home sellers. The month of May 2024 turns out the best at a 13.1 percent premium and the actual day of May 27 topped the list with a 16.2 percent premium[1]!
In terms of the specific day of the week, many real estate experts suggest that listing a house for sale on a Thursday can be advantageous. This allows the property to generate interest over the weekend when many potential buyers are actively searching for homes and Thursday listings give interested buyers time to schedule viewings for the upcoming weekend. So, maybe pick May 26 to beat the crowds.
As a seller, what if you miss it? And wait – what if you are a buyer, rather than a seller?
Don’t stress. These supposed effects are not nearly as significant as the clickbait would have you imagine and fade away when considering a few factors. Nevertheless, knowing that these conclusions exist may help you, whether you are a buyer or a seller.
Highest Premium
A good place to start is by determining what is meant by the ‘highest premiums’? The ‘premium’ is how far over the final house price is relative to the asking price. Let’s look at what has happened to the asking price. Frequently, it has been marked down for a few months, and this is especially true this year. In November of last year, the CEO of Redfin said, “we’re getting more markdowns now than at any point since at least 2015” and declared the market “dead as a doornail”[2] Now let’s look at the magnitude and consistency of that effect. January is the slowest month of the year, in terms of volumes.This is a constant across data sets (I’m using Zillow to allow me to drill down into MSAs and because it’s free, so you can do your own analysis[3]). Using data since 2008, the difference between the worst month and the best month is .7, meaning that the best month for sales (usually in June) is 70% higher than the worst month, which is always January. How quickly does this 70% get made up? In the US aggregate ½ of that difference is made up by the end of March, so it bounces back quickly and reliably. The premium comes from tired sellers marking down prices because of the slow volumes and then goes away when buyers return. Once that overhanging inventory is cleaned up, things go back to normal. This year the market which was “dead as a doornail” going into a historically slow period, is making its way out and we see things will recover.
That is what we see looking at the US as a whole. What about Phoenix? The effect is even more muted. First, comparing the best month with the worst month (no surprise it is January), the difference in Phoenix is only 50%. But by the end of March, almost all of that is made up and volumes remain constant. In fact, drop January and February from the analysis and the effect remains within the US dataset, although weak, in the Phoenix analysis, it is no longer statistically significant.
What we can all take away from this: there are opportunities all year in residential real estate, but January is just really bad. Fortunately, in Phoenix, these seasonal effects are way more muted than in the rest of the country.
[1] https://www.attomdata.com/news/most-recent/attom-best-days-to-sell-a-home-analysis-2024
[2] https://www.resiclubanalytics.com/p/housing-market-resale-activity-dead-doornail-redfin-ceo-says
[3] https://www.zillow.com/research/data/ Sales Count Nowcast