It is a special time of year: School is getting out, days are getting longer and the families are planning for the future! Seasonal adjustments help make it easier to compare month to month adjustments in the market. You can’t get a good picture of whether it’s a good or bad year by comparing a typically slow January with a typically busy July.
The raw data tells us that real estate follows a clear seasonal pattern. Inventory peaks in the summer, sales peak in the summer, real estate web traffic peaks in the summer. Notice a trend?
But each local market has it’s own cycle. The school calendar plays a big role since families with kids prefer to move while school is out. And not all school calendars are the same.
Weather also influences the real estate cycle. Cold weather markets such as Boston, Minneapolis and New York start later in the Spring. Does anyone in other parts of the country realize how much snow we get in the Northeast? You have to see the curb to have curb appeal!
Warm weather such as Miami, San Diego or Phoenix start earlier and demonstrate less seasonal variation overall.
There is also a herd mentality that influences the market peak. Driven by years of observations that there may be an optimal time to list that perfectly aligns with the peak demand to command the highest price and to do so as quickly as possible. Right now is one of those times!
When the sales are slower due to the season, the age of inventory rises and we start to monitor the median days on market of active listings. This typically bottoms out in June and peaks in Winter months like December and January.
As the age of inventory increases, buyers gain more leverage. That is why prices are also seasonal, peaking each summer when demand is highest and the age of inventory is lowest. If you are a buyer and can wait until the Fall or Winter you will find the prices will come down a bit and there will be less competition in the off season!
If you are a Seller or thinking about selling than now is the time! The inventory is low and the buyers are anxious to move while the kids are out of school and the weather is fabulous!
Contact me today to get more details about what is happening in the market in your area!