We’ve been at this real estate gig for a while now, and we can’t seem to recall a time when the seasonality of the market was so pronounced. Granted, we spend a lot more time digging into the data than we used to, but we think it’s more than that.
Real estate has always ebbed and flowed. If you didn’t know that home sales shoot up in the summer and down in the winter, you might live under a rock (or at least, you’re new to this whole thing). But the industry’s seasonality isn’t quite that basic anymore. It is both more nuanced and more exaggerated.
Let’s break it down:
The “off” season
If the housing market has an off season, it begins around the first of November as people start preparing for the holidays and ends around mid-January when people are finally done recovering from said holidays. The turkey and eggnog hangovers are gone and everyone starts counting down to warmer and sunnier days.
The chart below highlights this lull in market activity:
That said, buying during this time frame can be a strategic move. Interest rates tend to go down with lower demand and sellers are often under a lot of pressure to sell before Christmas or the New Year, so good deals can be found, especially if you’re strategic about it. Patience would definitely be key in this scenario though, as there’s just not much inventory to go around!
The spring rush
Beginning at the end of January or early February and stretching through the month of June, the market picks up pretty quickly. With 30-40% of annual transactions occurring during this time frame, both buyers and sellers are out and ready to go.
Recently, this period of time has been getting increasingly chaotic, as low inventory has resulted in bidding wars and multiple offer situations on most homes, particularly in popular neighborhoods where density is high. This past spring, it wasn’t uncommon for houses to sell within a day or two, sometimes even hours! And while the market usually slows down come July, this year we saw it maintain steady demand until right about now. It is early August and we’re just now taking our first deep breath in months!
Slowing back down
Come September, as kids head back to school and the weather starts to cool off (at least at night!), the market finally calms back down. While some transactions may occur, many of them are actually contracts that were created in the spring and summer months that are finally coming to close.
And, as seasonal spikes become stronger and more exaggerated over the years, the fall months are seeing less traffic than before. Whether or not this is a permanent shift won’t be clear until inventory levels finally come back up to a normal level (One day, maybe?).
The following graph shows a spike in days on market during the late fall and early winter months, not to mention that steep drop off come spring!
All of this is good information to keep in mind, particularly if you have the freedom to decide when you want to buy or sell (or both!). But we usually find that family, career, and/or financial factors end up dictating when our clients are able to enter the market, and honestly, there’s no good or bad time, per se.
There are benefits and drawbacks to any part of the seasonal roller coaster you may find yourself on, and a good Realtor will help you leverage whatever you can to secure a contract that feels like a win.