New data has become available indicating the typical amount of time it takes to sell a home has been shrinking. For traditional (non-distressed sellers) days on market is now in the range of historic norms for a balanced market, and well below the cyclical peak reached in 2009.
The median time a home was listed for sale on the market was 69-days in July 2012, down 29.6% from a high of 98-days recorded in July of 2011. The median reflects a wide spectrum; one-third of homes purchased in July were on the market for less than a month, while one in five was on the market for at least six months.
Economists agree there is a clear relationship between inventory supply and time on market. As inventory has tightened homes have been selling more quickly. A notable shortening of time on market began this spring, and this has created a general balance between home buyers and sellers in much of the country. This equilibrium is supporting sustained price growth, and homes that are correctly priced tend to sell quickly, while those that aren’t often languish on the market.
At the end July there was a 6.4-month supply of homes on the market at the current sales pace, which is 31.2% below a year ago when there was a 9.3-month supply. There are consistent and related findings that show current market conditions are comparable with median selling time in balanced markets. Historically, in periods where existing-home sales averaged a 6-month supply, which is near the low end for market equilibrium, median days on market were reported to be between 6-8 weeks...read more