While you might not think the seasons of the year have an influence on the price you are paying or asking for your home, it can make a big difference – in some cases, as much as 10%.
Seasonality of Real Estate—What are the Key Factors?
1. Weather-Weather impacts the seasonality of real estate differently, depending on the climate your home is in. For example, in some popular ski resort towns, homes prices can skyrocket during the winter months, while winter impacts the market in other areas negatively. Understanding how the weather and its seasons impacts real estate value is an important consideration both for buying and selling.
2. School Year- Studies have shown the busiest moving times of the year occur during the summer, with June being one of the busiest months and July 31 the single busiest moving day. This data means that people are most likely to shop the housing market from the beginning of May through the summer months.
3. Holidays- Many people do not want to move or uproot their family during the holidays, which essentially eliminates the period between November and January. Many people do not want to add a move on top of all the extra obligations of the holiday season. However, as a buyer, the holidays would be a good time to leverage a lower priced market combined with some holiday vacation days!
What Does Seasonality Mean for Home Buyers?
For a home buyer, it’s better to buy in an “off season.” As a buyer in off season, you will have more negotiating room, less competition, and overall lower prices for the houses on the market during the off season. In addition, sellers may be more willing to give more concessions such as money for repairs or a longer closing period in order to firm up a contract on a house during the leaner selling months.
What Does Seasonality Mean for Home Sellers?
If you are a seller, you want to obviously sell during those summer months, when the competition is fierce and the market is hot. Multiple offers and bidding wars are your friend as a seller. However, the downside is that when you are a seller, it usually means that you are also a buyer. In an ideal world, sell in the spring/summer months to make the most profit on the home that you are selling. Then find a 4-6 month temporary living arrangement that would allow you to wait to buy until the winter or holiday months when seasonality and lower prices are typically on your side as a buyer.
I’m Thinking of Buying/Selling. What Are My Next Steps?
If you are working with a real estate agent, they should be able to provide you with the market metrics for different seasons in your area. By comparing different months and years, you’ll be able to identify where there are significant peaks and lows in your current market and determine when your areas ideal periods for both selling and buying. Interested in the Austin area? Contact me today 512-817-0855. I would be happy to provide you with market trends of any area in Austin and a seasonal analysis of the best time to buy or sell!