The Market Moves in Cycles
One of the most difficult things to describe to new buyers is how the seasons of home buying ebb and flow. Most sites don’t do a good job of explaining how different conditions can be over the course of a year.
Below is a chart that shows the number of houses that go ‘under contract’ in any month. Hopefully, this will give you some sense of how seasonal the market truly is. But please note, each market moves differently and thus it is important to look at the how the individual market you are interested in behaves.
The Seasons of Real Estate
Early January – Beginning on January 2nd, the public begins thinking about the housing market. Our web traffic spikes almost overnight as the potential spring buyers begin their online search and start to do their homework.
Early Spring – Sometimes as early as the middle of February, more buyers start showing up, open house traffic spikes, and agents’ phones begin to ring. And while the contracts are not necessarily being written in bulk, available inventory starts to get gobbled up.
Late Spring – From the end of March through the month of May, the market really reaches its zenith. Marketing times plummet, multiple bids on any decent property are the norm, and prices tend to escalate. From January through May, roughly 60% to 65% of the homes that will sell in any given 12 month period will have received a contract, especially in the urban markets.
Summer – Towards the end of May all the way until the latter parts of June, you begin to see a geographic transition in seasonality. Suburban marketplaces that are sensitive to the school season will pick up as families attempt to make their move during school vacation. But by the time August rolls around, the main part of the selling season is largely over.
Fall – Once the kids get back into school and summer weeks at the beach end, there is a 45 to 60 day window to get a few more homes sold before everyone eats turkey and falls asleep. Generally speaking, the shrewd buyer can find some great deals during this time as the sellers begin to realize how little time they have left to get their home sold.
Winter – Not much happens after Thanksgiving, other than a few bargain hunters might try to make some deals with sellers who REALLY need to sell. Much like the latter part of the fall, once the holiday season starts, people’s focus generally turns elsewhere. Phone volume slows, as does web traffic, and the Realtors can finally get some much needed sleep …