How to Capitalize on Seasonal Real Estate Trends
A creative analysis of real estate seasonality and how to capitalize.
In real estate, we’re told “location, location, location” is everything—but in real estate investing, perhaps we should be saying “seasonal real estate trends, seasonal real estate trends, seasonal real estate trends.” That’ll catch on, right? Okay, maybe not. But in real estate investing, while location is big—timing may be bigger. And that’s why you need to take some time to learn how to capitalize on seasonal real estate trends.
Whether it’s getting the offer in at the right moment or exiting an investment at the height of the market cycle, timing is everything. And just like the market moves in cycles, the market has seasonal real estate trends, too. You can gain a serious market advantage by thinking strategically about timing throughout the year. It’s a fact: Seasoned real estate investors take into account—and capitalize on—seasonal real estate trends.
You probably aren’t surprised to learn about seasonal real estate trends, but naturally—the whole “taking advantage of seasonal real estate trends” thing is easier said than done. Sure, it’s a tough nut to crack. But WealthHunters is here to help answer your real estate questions.
Together, we’ll help you gain a foundational understanding of seasonal real estate trends. Not only will you learn some basics to year-round housing trends, but you’ll also learn how you can use the basics to reach your goals. To do our seasonal real estate trends coverage justice, we’ll start with an overview of housing sales by month. Then, read on to learn when is the best time of year to buy a house (and why). Ultimately, we’ll wrap up with the best time of year to sell a house, and how to take advantage of seasonal real estate trends.
An Overview of Housing Sales by Month
If you want to spot seasonal real estate trends, you need to take a look at housing sales by month. There are are a number of factors that change throughout the year based on the season, both with rent or housing sales by month. There’s a lot of ground to cover here, so here’s a start from the National Association of Realtors (NAR).
Of course, don’t just look at the housing sales by month here. Explore your local market’s sales data, check out listings, or even ask real estate agents and brokers in your area. There are a ton of really robust resources that can help you get a clue about the seasonal real estate trends in your area. We’ll go over why this is so important to do—specifically when seeking to spot seasonal real estate trends—later on in this section.
U.S. Existing Home Sales
Review the housing sales by month for the last 12 consecutive months. See what seasonal real estate trends you can spot.
- July 2017 – 5,420,000
- August 2017 – 5,420,000
- September 2017 – 5,370,000
- October 2017 – 5,500,000
- November 2017 – 5,720,000
- December 2017 – 5,560,000
- January 2018 – 5,380,000
- February 2018 – 5,540,000
- March 2018 – 5,600,000
- April 2018 – 5,450,000
- May 2018 – 5,410,000
- June 2018 – 5,380,000
- July 2018 – 5,340,000
Now, it’s good to keep in mind that this is just one year of housing sales by month. But did you notice any seasonal real estate trends? Across the U.S. as a whole, the housing sales by month hit the highest numbers in November 2017, at 5,720,000 homes sold. The next highest totals of housing sales by month took place in winter or early spring. In fact, the total housing sales by month were noticeably fewer in the summer and fall.
This data doesn’t paint the full picture of seasonal real estate trends. From the housing sales by month, we see there’s an increase during the winter months. But a savvy real estate investor doesn’t stop there. They know when the best time of year to buy a house is, as well as when the best time of year to sell a house is, because they combine housing sales by month along with other seasonal real estate trends.
The Best Time of Year to Buy a House and Why
If you’re looking to get a good deal—based on seasonal real estate trends—the fall and winter months are the best time of year to buy a house.
Data suggests that house prices hit their annual lows—as much as 8.45% less than in peak months—in January and February. Because spring is a popular time for moving, you may get a great deal in the fall!
Why do fall and winter make up the best time of year to buy a house? As the weather gets cooler and the holidays approach, most people aren’t actively looking to move. However, even though sellers may be more willing to make a deal, your dream home may be gobbled up. And remember that data on home sales by month? A lot of people take advantage of seasonal real estate trends. So it’s not always the best strategy to sit and wait on your dream property.
It’s a good habit to check out popular real estate listing sites every month or so to identify localized seasonal real estate trends. Generally, this will be a more reliable indicator of how the seasonal real estate trends in your area, rather than nationally or even regionally. Keep in mind that weather varies from region to region, so the best time of year to buy a house will vary from place to place. For example, western states like California don’t show nearly as substantial a shift in housing sales by month.
If you understand how seasonal real estate trends impact your market, you can begin to pinpoint when the prices may dip and find that deal. And a deal will always make for the best time of year to buy a house.
The Best Time of Year to Sell a House and Why
If winter is the best time of year to buy a house (based on seasonal real estate trends), the early summer is the best time of year to sell a house. Because many folks list their homes in the spring, the late spring and early summer make up the best time of year to sell a house—from a pricing perspective. This window can translate to a higher selling price for your home, and even how quickly your home is sold!
Why is early summer so popular? Here’s one of several seasonal real estate trends: People shop for homes when the weather warms up. You don’t want to juggle a move, your kids’ busy school schedules, and lousy weather all at once, do you? Most people don’t! This is one factor that impacts the seasonal real estate trends in favor of sellers, and helps make it the best time of year to sell a house.
If you’re looking for the best time of year to sell a house at a higher price, the spring/summer is your best bet. Seasonal real estate trends and housing sales by month suggest fewer homes are sold then. Based on pricing trends, however, it’s still the best time of year to sell a house for a higher price.
Seasonal Real Estate Trends and Your Home
Of course, just because we know about seasonal real estate trends, that doesn’t mean they’re the rule of the land. While the late fall and winter may be the best time of year to sell a house, or the late spring and early summer may be the best time of year to sell a house, you can capitalize on seasonal real estate trends year-round. The best time of year to buy a house is when you know your goals as a homeowner. Same goes for the best time of year to sell a house! Start with your goals and research your market’s housing sales by month. In the end, the seasonal real estate trends may help you find the right house—or sell yours—with fewer headaches and more smiles.