You’ve heard of a buyer’s or seller’s market, but did you know the real estate market changes depending on the season? First-time homeowners should know how the different seasons affect their buying power, allowing them to make better decisions and potentially save money on their first home purchase. But, of course, the real estate market fluctuates, and your local market will predict your selling or buying power, so you must continue to watch the market to get the best deals.
Real estate seasonality trends are common and can occur within the same calendar year. Let’s look at how the real estate market changes during the seasons.
Best Time to Buy
Of course, the best season to buy a home depends on the particular buyer. However, there are some months to buy a house that are better than others if you want to save money. For example, January is a good month to buy a home because it’s less busy than the summer months. Therefore, summer months have more competition, which can spark bidding wars, while winter months have less competition, which may help you negotiate better prices. In addition, by the time the new year hits, real estate activity in the area has likely decreased, so anyone who didn’t sell their house during the summer may be more desperate to sell, potentially reducing prices. Additionally, if a house sits on the market all summer long, the buyer will have more negotiating power.
While winter is the best season to buy a house, the worst seasons to buy a home are fall and summer. For realtors, April is typically the busiest month of the year, meaning buyers have less power because there’s more competition. Home prices often increase around this time, so if you’re looking for a great deal, consider waiting until summer has ended.
Real Estate Through the Seasons
Now that you understand the best and worst times to buy a home, let’s discuss the different seasonalities of the real estate market.
Summer Real Estate
As we’ve just discussed, summer is the hottest real estate season, with tons of competition and more houses on the market. Summer comes right after spring, and it’s the time of year when most people are actively buying or selling. This is especially true in areas with all four seasons since activity typically ramps up during the warmer months. During the summer, buyers have fewer commitments; they don’t have to worry about taking their kids to school and picking them up, and the cold weather doesn’t keep them from touring multiple properties. Unfortunately, sellers know buyers typically come out of hiding around spring and summer, so they price their homes accordingly.
The summer real estate market is competitive. Buyers and sellers compete constantly. Sellers compete with other sellers in the area, and buyers may have to give up some of their negotiating power just to lock down a deal. In addition, sellers know that competition means a higher asking price, but they must compete to get the buyer interested in their home. Everyone is competing with everyone else during the hot summer months.
Of course, there’s nothing wrong with a little competition in the housing market as long as both buyers and sellers are prepared. For example, buyers shopping on a budget must include the potential for bidding wars, so they may have to look for homes with a lower asking price. In addition, buyers will have to find other ways to land their dream home, such as sending personal letters to the seller to sway them.
Meanwhile, sellers must accurately price their homes during this time. If a similar home has a better price, it’ll get the attention of all the buyers. In addition, they’ll have to find ways to stand out during the competitive season, which may include spending more money on marketing and advertising the property listing or investing in renovations such as kitchen remodels to prep for the back-to-school season and repairs to make the property more attractive to buyers.
Autumn Real Estate
During the fall, the real estate market is still hot from the competitive summer. However, many homes have sold by this time, which means more negotiating power for buyers. Fall may signal a slowdown in the real estate market, depending on where you live, especially as temperatures drop around October. However, it’s still a great time to buy and sell. When the weather starts to cool, and we get closer to winter, the market favors buyers because sellers start getting desperate to sell, especially the longer their homes are on the market. During the fall, there’s less competition because most people looking to buy a home do so during the summer, so buyers will have to reduce prices soon.
In addition, buyers stop competing with other buyers because there are fewer of them, which means fewer bidding wars and more opportunities to negotiate with sellers.
Winter Real Estate
As we’ve mentioned, winter is the best time to buy a home. There’s virtually no competition among buyers because most purchase a home during the warm months. Now, those individuals are cozy inside their new homes waiting for spring again. However, those who want to buy a home during winter have tons of negotiating power. Sellers must consider every offer that comes in because there are fewer buyers, which means fewer chances to sell. In addition, winter is usually when most sellers reduce their prices to get more attention from prospective buyers.
Therefore, if you’re looking to buy a home, you can take advantage of great deals while everyone else is hibernating for the next few months and land your dream home at a lower cost.
Spring Real Estate
During the spring, the real estate market picks back up with more activity than in the last few seasons. Those looking to purchase a home will come out of hibernation as soon as the weather gets warm again, which means more competition among buyers and sellers. If summer is the most competitive season, spring is the second most competitive as people begin fixing up their homes and preparing to sell. However, the more demand there is, the more power sellers have.
Is Seasonality Always a Factor?
In most cases, seasonality is always a factor, no matter what’s happening in the economy. Even if we enter a three-year seller’s market, you can still expect buyers to have more power during the winter, when sellers are most desperate to sell. However, the best time to sell a house depends on your unique circumstances.
Megan Isola holds a Bachelor of Science in Hospitality and a minor in Business Marketing from Cal State University Chico. She enjoys going to concerts, trying new restaurants, and hanging out with friends.