It’s September. The leaves are beginning to turn and it is back-to-school time for kids. And if you’re a potential home seller, giddy-up! The real estate “mini-market“, as I like to call it, is here. So what exactly is the “mini-market”?
The “Mini-Market” – What is it?
As soon as the calendar turns to September, the real estate “mini-market” gets underway. The months of September through December are filled with holidays and excitement. Many home buyers are on a quest to find their right new home and be moved-in by December. There is a unique sense of urgency that happens during the “mini-market”. And for potential home sellers, this almost “blink-of-an-eye” real estate season can be a stellar opportunity.
You may be wondering, however, “Does anyone really list their home for sale during the “mini-market” months of September through December?” There are countless reasons as to why someone may choose to list their home during the “mini-market” and sometimes the timing is not by choice. Homeowners may be selling due to a change in household, such as the addition of a new baby, parent moving in, kids moving away, new life partner, divorce, etc. For some homeowners, there may be a wonderful job opportunity that beckons them to another state. Or perhaps there are health reasons prompting a move to a smaller home with no steps for easier living. And if we take a look at the numbers, you will see that the “mini-market” is an active and robust time to put your home on the market. Shall we dive in?
The “Mini-Market” – Listings By Month
Let’s examine the number of homes that have sold in accordance with the month they were listed during the “mini-market”. In 2022, there were a total of 776 sold homes that were listed during the “mini-market” based on the towns comprising The Minken Housing Index. As shown in the chart below, slightly more than one third (36.7%) of the total number of sold homes were listed in September and another 30.4% were listed in October. The balance of the sold homes were listed during November and December. So if some of you were thinking that no one lists their home for sale during the holidays, think again.
This home listing pattern during the “mini-market” is consistent with the prior years (2021, 2020, and 2019). The chart below shows that most of the sold homes were listed in September, followed by October. As might be expected, fewer sold homes were listed in November and December. It is interesting to note that pre-pandemic, 43.0% of the sold homes were listed in September alone.
The “Mini-Market” – It is Shrinking
While the home listing pattern during the “mini-market” has remained relatively consistent over the past 4 years, the market activity, however, has significantly shifted. As indicated in the above chart, there was a major jump (37%) in the number of sold homes listed in the “mini-market” from 1045 homes in 2019 to a remarkable 1430 homes in 2020 based on The Minken Housing Index. This listing peak during Covid represented a “re-shuffling” as many homeowners were re-thinking the importance of home and where they wanted to live. There was a boom in the work-from-home population and many homeowners took advantage of the opportunity to move closer to family. The buyer pool was plentiful as many people who were currently renting sought to accelerate their timetable and move to the suburbs.
And then the housing inventory levels began to taper off. In 2021, the “mini-market” saw nearly a 30% reduction of homes sold down to 1011, which was below the pre-pandemic level of 1045. This sharp decline was repeated the following year in 2022 with 23% fewer homes sold (776) that were listed during the “mini-market”.
With inventory levels decreasing across the country, you may be curious about home prices and whether there is a softening as well. So let’s go ahead and see what the data over the past 4 years tells us about how home prices are trending across the Northern New Jersey towns comprising The Minken Housing Index.
The Rise in Home Prices
Like the major increase in the number of sold homes listed during the “mini-market” in 2020 versus 2019, the average price of the homes sold also experienced a significant boost. As illustrated in the chart below, the average price of homes sold based on The Minken Housing Index was $767,045 in 2019 and increased by a whopping 14.2% to $876,411 in 2020. In 2021, the average price of sold homes listed during the “mini-market” rose slightly by 3.7% to $908,494. And in 2022, the average price of homes sold increased by 7.1% to $972,893. Wow! That’s a 27% increase from 2019!
Thus, as the number of sold homes decreased since 2019, the average price of the sold homes during the “mini-market” has increased during the same period. If we examine the data a bit more closely, we see that not all towns are trending precisely the same way.
As detailed in the chart below, the market activity in a few of the 14 towns comprising The Minken Housing Index did not see an increase in the average sold home price each year. For example, Summit, Chatham Township and Berkeley Heights saw a modest decrease in the average home price of sold homes listed during the “mini-market” in 2021 compared to the prior year. Excitingly for sellers, in comparison to the pre-pandemic “mini-market” of 2019, all towns saw an increase in the average price of homes sold in 2022.
A quick glance at the chart below also shows that the number of sold homes that were listed during the “mini-market” in each of the towns comprising The Minken Housing Index has sharply declined in 2022 from the pre-pandemic levels of 2019.
The “Mini-Market” – It’s Like No Other Real Estate Season
There are some unique characteristics of the “mini-market” that make this real estate season particularly noteworthy. As we saw in the charts above, home sellers consistently list their home during the months of September through December. And each year since 2019, there has been an overall upward trend in the prices of homes sold that were listed during the “mini-market” based on The Minken Housing Index.
One of the factors that makes the “mini-market” quite distinctive amid the various holidays and potentially wintry weather, especially here in the Northeast, is that the homeowners who choose to sell at this time are very serious sellers. It is a relatively short selling season and the homeowners who list during the “mini-market” have a compelling reason to sell at this point in time, rather than wait until the flowers are in full bloom during the Spring.
Another factor that magnifies the importance of listing a home for sale during the “mini-market” is that for some sellers, this is “not their first rodeo”, so to speak. While this analysis focuses on homes that were listed during the “mini-market”, some of these properties actually may have been a “re-list”. What is a “re-list” you might be wondering? Let me explain.
There are some properties that may have been listed in late Spring or Summer and did not sell. This might happen when the list price is perceived to be too high, the home does not show well in the online photographs, etc. And for a home that does not sell when it initially goes onto the market, the Days On Market (DOM) begin mounting and many of the would-be buyers typically start thinking, “What is wrong with the house?” As these homes linger on the market, sellers may consider a market re-positioning or price reduction. In some instances, the home seller may end up simply “chasing the market”.
As an alternative, some home sellers may decide to completely “re-fresh” the listing. With this approach, the property is withdrawn from the market and then “re-listed”, often at a new list price. And voilà! The Days On Market (DOM) clock is re-set to zero and it pops up on the buyer’s internet feed as a new listing! Thus, some of the properties that are shown as listed during the “mini-market” are actually a re-list! And the sellers of a re-listed property are often uber-motivated. As a skilled and experienced realtor, I love working with both my sellers and buyers in identifying the nuances of the market, such as when a property is “re-listed”. This kind of assistance when tailored to their specific circumstances helps them to navigate wisely and efficiently to achieve their real estate goals.
From my perspective, the overall temperature of the “mini-market” can be quite “hot”. It’s a very exciting real estate market that frequently moves at lightning speed. The “mini-market” consists largely of home sellers who are very serious about selling, especially if this is their second go-around and are “re-listing” their home for sale. And the buyers are serious as well. They, too, may have their own sense of urgency. Some buyers may have a rental lease that is ending and cannot be extended. Other buyers might have a baby on the way, or relocating for the start of a new job, etc. Many buyers during the “mini-market” are compelled to look for a new home in a specific timeframe.
The combination of “serious sellers” and “serious buyers” has the potential to create a truly sizzling real estate opportunity. If you are a would-be home seller, the “mini-market” can be a great time to list your home. Your property can stand-out on the market with less inventory compared to the Spring. At the same time, you also have very serious buyers who are looking to make a home purchase.
And if you are a home buyer, the ‘mini-market” is an excellent time to be house hunting since many sellers are very motivated with realistic pricing. In addition, if you are a home buyer during the “mini-market”, you typically will experience less competition since many more buyers begin their home search journey in the Spring. Now how thrilling is that! The “mini-market” is unlike any other real estate season!
The “Mini-Market” of 2023 – What Can We Expect?
As the 2023 “mini-market” kicks off, you might be curious about what to expect. Despite the somewhat sluggish inventory nationwide, the “mini-market” in 2023 won’t come to a grinding halt. Life changes are happening all the time, creating windows of opportunity for potential sellers to list their homes for sale. If the timing aligns with your personal circumstances, the “mini-market” can be an exceptional time to put your home on the market. Buyers are eagerly “waiting in the wings”, and many are actively searching for their dream homes during the “mini-market”.
During the 2023 “mini-market”, I believe we will see an increase in buyers paying “all cash” if they have the available funds, rather than opting for a mortgage with today’s higher rates. Additionally, sellers will likely set more realistic listing prices, driven by their strong motivation to sell their homes by year-end. Unlike the past Spring, I anticipate we will see fewer instances of “buyer remorse” during the current “mini-market”.
All in all, giddy-up and get ready for an exciting ride. The 2023 “mini-market” is going to be riveting . My question to you is, “Will we see YOU in September?”
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