When you’re selling a home, the ideal outcome is to have it sell quickly and at top dollar. If that doesn’t happen, you might be wondering why—especially if nearby homes seem to be flying off the market at record speed.
If you’re buying a home, you may wonder what it means when a house has been sitting around much longer than comparable homes nearby. Is it a good opportunity or will it be a money pit?
“Not every home that is listed for sale goes under contract and then comes back to the market means there is something ‘wrong’ with the home,” says Sandy Krestan, a senior loan officer in Phoenix with Fairway Independent Mortgage Corporation (Fairway owns Home.com). “There are many reasons why that happens. Sometimes it is as simple as the buyer got cold feet and changed their mind.”
But other reasons, such as a home being overpriced, are more concerning. That’s why understanding how long a house should be on the market can help you assess a homebuying opportunity accurately.
We’ve rounded up tips on what it means when a house has been on the market for a long time and what to do when this situation arises, whether you are a buyer or a seller.
What's in this Article?
The short answer is: it depends. “Too long” could really come down to the nature of the real estate market, including time of year, season, state of the economy, and what’s happening locally.
It also depends on what you mean by “on the market.” Some buyers interpret “on the market” as how long the home goes before it gets an accepted offer – when the home changes to “pending” status on a home search site.
In some markets, a home sitting for a week or two before it “goes pending” could mean there’s an issue with the house, it’s priced too high, or simply that the sellers are taking their time reviewing offers.
If “on the market” means the total time it takes to sell, from list to close of escrow, it’s harder to nail down a normal timeframe. Some buyers choose 15-day closings, some choose 45 days. So a house that is in “pending” status for 60 days may not mean there’s something wrong with the house. The buyer could have had an issue, or simply selected a longer closing timeframe.
We’ll go into various reasons why a home would sit on the market, and what is considered “normal” in many markets today.
According to a report from the Federal Reserve Bank of St. Louis, the median days on the market for U.S. homes in October 2021 was 45 days. Keep in mind, though, that this is not the time it takes for a home to get an accepted offer. It’s how long it takes to sell from start to finish, from listing the home to sale to close of escrow.
Median days a house was on the market 2016-2021
|Month/Year||Median days on market|
|October 2021||45 days|
|October 2020||53 days|
|October 2019||66 days|
|October 2018||68.5 days|
|October 2017||74.5 days|
|October 2016||79 days|
The 2021 housing market has all but reached a fever pitch compared to prior years. These figures should give you an idea of how long a home stays on the market. Remember that these are national figures, and the numbers could be higher or lower based on your local market.
“Local market absorption rates dictate the number of days on the market based on demand,” says Sarah Richardson, founder and CEO of Tru Realty. “This means that if a home is on longer than the local absorption rate, typically, it is priced too high.”
A home price is too high when the listing price exceeds the market value of the home.
“There are numerous reasons why a home may come back to the market. It could be as simple as the previous buyer changing their mind or not qualifying for the financing,” says Joe Pessolano, a branch sales manager with Fairway in Garner, N.C. “But many times, contracts fall apart due to the sales price not being supported by local comp sales or home inspection issues that could be structural in nature.”
“Comp sales” are comparable homes that have sold in the area, and are vital to determining a home’s value.
If you’re in a market with high demand for houses and a property has been listed for several months, it may be overpriced. That can work to your advantage, since you may be able to put in a winning offer that’s under the asking price. But it’s critical that you schedule a thorough inspection to ensure there are no major red flags.
Your appraisal may also dictate the final deal, since a mortgage lender will not approve a loan for more than the home is worth. If the property appraises for less than your agreed-upon sale price, you’ll need to negotiate the price with the seller or pay the difference out of your own pocket.
In a “seller’s market,” homes sell fast because there are more buyers than homes for sale. In this situation, sellers may receive multiple offers quickly, often getting top-dollar for their home, and even commanding offers well above the asking price.
If there’s high demand for homes in an area, but one is sitting for months on end, it’s not necessarily a bad deal. But it is wise to proceed with caution and have your real estate agent learn as much as possible about the property and why it hasn’t yet sold.
There are more homes for sale than there are buyers in a “buyers market.” This means that those eager to sell their homes may find themselves waiting around for an offer. If a house sits on the market longer in this situation, it’s expected and doesn’t raise as many red flags.
According to a report from Zillow, in April 2021, nearly half of homes were on the market for as little as one week before getting offers. Brandee Harrington is a licensed Realtor in Jackson, Miss., who’s seen houses move relatively quickly in this red-hot market.
“In a seller’s market, like the one we are experiencing, you should expect an offer in 24-48 hours, provided it’s priced right,” she says.
Harrington explains that this is the most robust seller’s market she and other agents have seen, due to drastic increases in demand. “With remote work skyrocketing, lower interest rates, and building materials shortages, the perfect storm is giving way to an intense seller’s market.”
Related Reading: What Will Homebuying Be Like in 2022? Here’s What New Forecasts Say
The person best equipped to answer that question is your real estate agent. Because real estate is so dependent on local conditions, your agent will be able to assess whether a house’s days on market are cause for concern, whether you’re a seller or buyer.
Pricing the house appropriately is crucial. A seller’s agent can give you tips on which improvements to make prior to listing, how to spruce up the home to make it more appealing, and what a reasonable price might be based on similar homes that have sold in your area.
If your home has been sitting for some time, your agent may advise you to take it off the market and relist it later so homebuyers don’t get turned off when they see how long it’s been up for sale.
“After about three weeks, it does send a red flag to buyers and their agents,” says Mandee Sears, a real estate agent in the metropolitan Indianapolis area. “They figure it’s overpriced and/or that there is something wrong with the home. It becomes ‘stigmatized.’”
Her tip for sellers: “Don’t price your home like a garage sale item, leaving room to negotiate. That’s old school and doesn’t work in today’s world. Price it more like an auction item. If you price it just under what the market will bear (an auction opening bid), you will generate value, interest, and a sense of urgency in the eyes of the buyer.”
As a buyer, you want to ensure that a property doesn’t have significant defects that have prevented it from selling. Here are some questions to ask before making an offer to help you figure out whether a property is worth pursuing:
- How many times has it been under contract?
- How many home inspections have been done? What were the findings?
- What information is contained in the seller’s disclosure?
Any property defects the seller knows about, including issues exposed in a prior home inspection, must be outlined in the seller’s disclosure for the property. However, you should validate the information in the seller’s disclosure with your own home inspection. With this process, you can better understand the home’s issues and, possibly, why it’s not selling as quickly.
If you still like the house and are willing to make fixes, you can ask your realtor to adjust your offer based on the cost of those repairs. A seller who wants out quickly might be more agreeable to negotiating the price than fixing the property themselves.
1. It’s overpriced
The property is priced higher than its appraised value. Lenders will not approve loans for more than the home is worth, so homebuyers may back out of a deal if the sale price is far more than the market value. Buyers also do not want to end up “underwater” on their homes, meaning they owe more on the property than it’s worth (and therefore more than they could sell it for).
2. Structural and other issues
Significant structural issues, such as cracks in the foundation, bulging exterior walls, or extensive water damage can be deal breakers. Structural issues are quite costly to repair, and buyers will often seek out properties with fewer immediate concerns rather than take on the responsibility of making the repairs.
3. Outdated design or layout
Bathrooms and kitchens are major selling points for a home. If they look outdated, it can affect the listing’s impressions. Furthermore, if the home’s layout gives it an obsolete or nonfunctional appearance, that can be a problem, too.
4. Previous offers fell through
Sometimes sellers will accept an offer, only to see the sale fall through if the homebuyer is unable to get a loan for the home.
“Generally, when a home comes back on the market it has nothing to do with the home – just the potential buyers financing falling through with their lender,” says Garret Seney, a Fairway mortgage advisor in South Boston. This creates an opportunity for other homebuyers, he says.
Because of the demand in the current market, some buyers make offers before knowing what they’re committing to, and later back out.
“Sometimes you have a cash buyer who made an offer without looking at the home and then backs out once they are able to view it,” says Jason Paull, a Fairway loan officer in Spokane, Wash.
Neither of the above situations “signify something is wrong with the home itself,” Paull says.
In other cases, the homebuyer may have backed out of the deal as they spent more time at the property or after they saw the inspection report.
The latter cases aren’t necessarily deal breakers. Previous buyers may have realized they didn’t like the aesthetics of the home, that it was too far a commute even though they liked the house, or many other issues they didn’t see at first. That doesn’t mean the house won’t be right for you.
If they canceled the deal because of something in the inspection report, that’s something you want to know. But even then, don’t write the house off immediately. Maybe it needs a few repairs that you don’t mind making, or you like the fact that it’s a fixer-upper.
The important thing is to gather as much information about the house’s history as possible so you can make an informed decision.
How long should a house be on the market FAQs?
In today’s market, many homes have offers within 24-48 hours, says Harrington. The seller may accept an offer shortly after that. For the whole process, from list to close of escrow, St. Louis Federal Reserve data show that houses take around 64 days to close (average of the median figures) in the past six years. However, more recently, the nationwide median has dropped to 45 days for October 2021, with many local places experiencing much shorter sales cycles.
You should compare your home to nearby homes with similar features and see how long it took for them to sell. If you are approaching the average “days on the market” figure for your area, it could be time to talk with your real estate agent about changing your sales strategy. Too many price reductions too soon could raise concerns for buyers.
Not necessarily. Mentally, buyers may look for homes that appear empty because they may believe they can move in faster. From a buyer’s perspective, this may seem like a way to move into their dream home. However, an occupied home is already staged and could have more marketing appeal over an empty house, which could cause it to sell faster than a vacant home. Consult your real estate agent or a professional home stager for tips on what homebuyers are looking for in your area and how to best present your house.
Don’t assume the worst of a house solely based on how long it’s been on the market. But do your due diligence so you know what you’re getting into if you choose to make an offer on the property.
“Buyers should definitely ask the question as to what happened to cause the home to come back on the market and they should be able to get information to help them understand what happened,” Paull says. “But it’s definitely not always something wrong with the home.”
Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.