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

How I Learned to Stop Worrying and Love the Coronavirus

Greetings, Today I wanted to simply jot down some thoughts I had about this novel coronavirus (COVID-19) that the news cycle seems to love to talk about: - Will real estate values be affected? The answer is the same as every real estate question, it depends. I believe luxury will be impacted, I think more modest dwellings will not, and for a very simple reason, there is not more inventory and people have to live somewhere. - Is this our 1987 moment? In 1987 we had Black Monday, the biggest one day stock market drop in history, afterwards, real estate prices went up in a straight line for 18 months. Just like any good investor, when there is a shock to the system, you have to recalibrate, you either go to safety (or even relative safety, like houses versus paper ownership in a company), or you go to what has been undervalued. I suspect there is a good chance this is our 1987 moment for real estate. The 80's are dead, long live the 80's. - The drop in stock price...
Post a Comment
Read more

Your First Home: Step 7-Close

We got through the home inspection, that was intense. What’s next? Why, title and appraisal of course! We are in the home stretch; you can do this. As the lender is finalizing the mortgage, they are doing a little bit more digging: appraisal to confirm the value, survey to confirm the boundaries, title to verify ownership, and title insurance. Appraisers will look at the home and comps to determine what they think the home is worth and relay this to you and the lender. The lender will only write a loan for the home’s appraised value, so if there is a difference between selling price and appraisal price-buyer and seller have to come together to cover the gap. Therefore, it is important to create a win-win situation, both parties have to work together at times. Survey is to determine where the homes boundaries are and are not. You would be surprised how many times a neighbor’s fence may be on your property due to boundaries of each property being forgotten over time and various homeo...
Post a Comment
Read more