You know what they say: To everything there is a season. The real estate market is no different. Any smart investor – and real estate agent – will tell you that market conditions during certain times of year are more favorable for buying or selling.
Understanding the real estate market “seasons” and the best times to make a move can help you make smarter investment decisions.
Yes. There are certain times of the year when the real estate market is pumping, and other times of the year when it’s as quiet as a mouse.
As a general rule of thumb:
– December and January are quiet months
– March and April are the busiest months
There are many reasons why the market moves this way. Buyers usually ramp up their efforts to find a home in March and April, near the end of the school year. Search activity is also high in June and July.
Parents usually prefer to have their kids finish out the school year before they move into a new home, especially if the children will be switching schools.
The weather is also warmer in the spring, which makes it a more favorable time of year to move.
Since 1999, sales of existing homes increased by an average of 33% between February and March. And home sales continue to increase by 10% each month until June.
May, June, July and August account for 40% of home sales in an average year.
The market is typically quiet in December and January. Families prefer to stay put during the hectic holiday season, and the colder weather makes moving to a new home less desirable.
September through December is usually a slow period for real estate across the country. Existing home sales fall by an average of 16% between August and October, and fall another 10% in November.
Sales in the months of November through February account for about 27% of the average year’s total homes sales.
Sellers usually prefer to wait until peak season to sell because they can expect to get around 3% more than the annual average. Homes sold in December and January, on the other hand, usually close at 3% lower than the annual average.
Peak season varies, depending on the region of the country.
In the Midwest, the peak of the season arrives in May – one month ahead of other parts of the country. But this region experiences even fewer sales from October through February.
In the Northeast, the home-selling season doesn’t reach its peak until June and only lasts through August.
Playing off the seasonality of the real estate market, you can find the best time to buy or sell.
For sellers, the most obvious time to put property on the market is the spring and summer. There are plenty of buyers during this time, and properties, as mentioned previously, sell at a higher price.
Spring is the best time to sell. Inventory is still on the low side, and buyers – especially families –are eager to find their new home.
Summer is still a great time to sell, as there are still plenty of buyers. But at this point in the season, you reach a peak and there’s a surplus in inventory. With lots of options available to buyers, it may take a little longer to sell your property.
If you want to be a little more specific, the best day to list your property is a Thursday. Putting the property up for sale on this day will make it available for weekend showings right away.
If you’re forced to sell your property in the fall or winter, you can enjoy one perk: Serious buyers. Buyers who are shopping during this time of year are usually to the point and are ready to make a deal happen.
For buyers, fall and winter is the best time to score a good deal on property. Even in states where winters are warm, like Florida, Arizona and California, the fall and winter months are slower because kids are just getting started with the school year and the holidays are right around the corner.
When sellers put their property on the market in the fall and winter months, they’re usually looking for a quick sale. And because there’s less competition from other buyers, you have more room to negotiate on a better price.
From an investment standpoint, these colder months are the best time to find property at a great price. You may also find some great fixer-uppers that need minimal work to turn a nice profit at sale.
According to Time, the best time to make an offer on a home is in January when competition is low and sellers are more willing to negotiate.
The best day to make an offer, according to Time, is the first Tuesday of the month. At this point, the seller just wrote a check for another mortgage payment and may be worried that there have been no offers from buyers who viewed the home the previous weekend.
But don’t wait too long to make an offer on a property you’re really interested in, especially when hunting during peak season. Properties can come and go on the same day, which may mean that you miss your opportunity if you wait too long.
On the other hand, spring and summer offers more options to choose from and increases your chances of finding the right property. If you have a particular type of property that you’re looking for or you plan to live in the home, you may want to start searching in early spring.
While these are all great rules to know and follow, a savvy investor keeps a close eye on the market all year long. But having an understanding of the market’s ebbs and flows will help you know how to negotiate a deal depending on the time of year.