Seasonal Summer Real Estate Trends
The most pressing real estate questions asked is: is this a good time to buy and/or is this a good time to sell? There’s a common belief that spring and summer are the best times for real estate. This notion is then reinforced by a conditioned mentality that if you are to buy, you should buy in the spring/summer. Or if you are to sell, you should list your home in the spring/summer to meet the increased demand of purchasers. However, some of the sales trends don’t necessarily validate such a catastrophic swing in sales.
According to the US Department of Housing Developments most recent quarterly statement, a seasonally adjusted annual rate of homes sold in 2016 will equal approximately 5,300,000 homes. That means that over 14,000+ homes sell per day across the United States. The number of sales per month may vary slightly but the fact remains that there are a huge amount of homes that sell each and every day. People have needs to sell their homes throughout the year as do buyers who need to buy. When you average it all out, the current trend is a positive amount of closed transactions are taking place.
Historically, it’s likely that June has the most amount of “closed,” transactions. Nowadays, that means that the contracts first took place back sometime in April or May. A contract in April or May, could indicate that the purchasers began their shopping in March or so. It also could demonstrate that sellers put their homes on the market in March, or even February. This is a prime reason to read up on how spring break can affect selling your home. So although June has the highest amount of “sales,” this should not be read as an indicator of when the market is the “hottest.” The real work of the real estate market happened several months before summer actually began.
Likewise, it should be noted that often times July is one the highest amounts of standing inventory. This would typically be an indicator for a slower market. If the inventory is high, that means that there are more houses to sell than there are buyers chomping at the bit to purchase them. High inventory in July could be explained by listings that didn’t quite sell in the month(s) before AND then other sellers who saw the flurry of activity in June showing up fashionably late to the party. But fear not, high inventory in July has still historically resulted in strong closings for July and August.
In most markets, September and October can be lean months for closed transactions. Sales are still coming off the high of summer but beginning a downward trend as the market enters into the next season. What does that mean for summer? It means that if you are looking to sell your home, you”ll likely want to go under contract no later than August. Most folks may want to be settled by the beginning of a school year. Whether purchasers have kids attending school or not, there seems to be a bit of a scramble towards the end of the summer. This month could also be advantageous for the seller who puts their home on the market in August. The buyer who’s been searching all summer and been beaten out of multiple offers may be poised and ready to go for that new listing that pops.
There’s a ton of real estate activity in the summer but don’t be dismayed that it’s the only time to buy or sell a home. The market may be flooded with both buyers and sellers who are simply “testing the market.” Sellers may be putting their houses up at increased prices just to see what happens. Buyers may be out there “just looking.” The end of the summer season may weed out those who are serious and those who are not.
Certainly, warm weather and seasonal changes will kick up increased home sales. However, thousands of homes sell each day. June may have a higher number of closings but the real work took place months before. Seasonal trends are important to follow but perhaps more importantly (and more directly correlated) is how the overall economy and interest rates are doing. For now, the real estate market is looking great and things are continuing to appreciate at a healthy rate for buyers and sellers alike. For further review, be sure to check out the HUD first quarter report for 2016. And if you’re ready to get your home listed, be sure to check out some awesome open house ideas for summer and other helpful articles.
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