Skip to main content

Seasonality in Real Estate

Today we will address some misconceptions we have heard of the real estate market, specifically that "summer is the best time to sell", and though it is true that most transaction close in May, June and July (with June being a peak), many go into contract (mostly for 45 days now) in March, April and May, after starting to think about it after the new year. Below is a chart of the existing home sales nationwide, the date includes up to April 2016:
raw-ehs
This applies not only to sales, but also to rentals, though we have much less data to show this, anecdotal evidence (we have 7 moveouts for June 2016), experience and thinking through it should make it clear that most renters do not want to move in November and December.
In Chinese culture, the 'Dragon Boat Festival' (or "Duanwu Jie") is a summer festival, this year starting on June 9, 2016, it essentially celebrates the Summer Solstice. This is important as this is a vacation time for this segment of housing demand.
Activity tends to slow down after Memorial Day (as the market is feeling now) as children are on summer break, with the 4th of July being another dip in sales activity until September.
There is also the expression in the stock market to 'Sell in May and Go Away', which carries  this same philosophy.
Note that seasonality is not destiny, and as there is also less inventory available at those times, below are figures for Orange County:
Orange County
Note in the above chart, that 'for sale' inventory builds after May as the red line (pendings) dwindle.
In conclusion, the best time to get the best price (for sale or lease) of your real starts in March, builds and peaks in  May, then drops after July, with July itself closing out those going into escrow in May and June.

Yorba Linda, CA-TRREG DRE#01843673-RP100 DRE#02059058-P:714-831-1800-E:info@theresultsrealestategroup.com-W:www.theresultsrealestategroup.com-Facebook - Twitter - Instagram - LinkedIn
Labels:
Location: Brea, CA, USA

Comments

Post a Comment

Popular posts from this blog

Your First Home: Step 8-Protect Your Investment

Welcome to the world of home ownership, besides feeling like you signed your life away-how does it feel? You may find yourself feeling pride of ownership, because you now in fact own something. But with great power comes great responsibility-home maintenance. One of the best resources for you, even after the transaction, is going to be your real estate agent. Chances are, if you need a specific kind of vendor-they have one they trust and can refer you to. Home maintenance falls into two categories: Keep it clean and keep an eye on it. Review the maintenance needs for your home once you are settled in plan for regular service. If you notice something different, investigate it and fix it. A small problem not treated turns into a massively more expensive problem when ignored. Be sure to also read your home warranty, some of the repairs that come up may be covered. Also, have reserves set up for “Life Happens” situations. Finally, the most important part, Housewarming Party! Nothing w...
Post a Comment
Read more

Real Estate Investments: Invest Up

I want to speak briefly to the masses today. Normally our audience is the Buyer and Seller, and yet it is easy enough for anyone to become both. It could even happen that you are a Buyer, Seller, and Investor at the same time! How can this be? Me, a normal person can be a Investor? Yes. Even more than that, as soon as you start your journey you start doing something greater than yourself, building generational wealth. Let's start at the very beginning, a very good place to start. This beginning looks like a house purchase. That would be because it is a house purchase. Assuming you are buying this house to rent out, you are now a Landlord and Investor. The first house is going to be the scariest, it gets easier from there. Let's assume you have rented out the house for a couple of years and you are looking to upgrade from a Single Family Residence to a Duplex. You would sell your Single Family Residence and 1031 the proceeds of the sale into the purchase of the duplex. Yo...
Post a Comment
Read more

Why Real Estate is Such a Good (Great) Investment: Part 3-Sell it

This is the next installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.  Alas, today we will be discussing the main thing people think about when they think about real estate investing, selling the asset high after buying low. The biggest advantage to selling real estate is the value added you can do yourself. There is no requirement to hire anyone to do any repairs on the property, as real estate is sold as is. You can do your own marketing, your own negotiating, there does not have to be anyone between you and the market unless you choose for there to be. You choose your partners at terms you both agree with. With that great power, comes great responsibility. Though you can do it yourself, it is more advisable to partner with those who do it every day, rather than every so often. Consider that a real estate transaction employs a...
Post a Comment
Read more