June 26th 2012
Each year as winter sets in, many would-be home sellers put their plans on hold until the spring arrives.
The house presents much better in spring so therefore it will sell better, goes the thinking.
Stock levels are very seasonal in the housing market. Interestingly, buying demand is not so – it is far more constant.
A buyer will buy the right property when they see it, regardless of season.
This idiosyncrasy causes the market to be at its strongest in seasons of tight supply – such as winter.
Each winter, many strong sales results are achieved due to tight supply with ready demand. These same results would not be attainable a few months later in the spring.
The lack of stock creates temporary and artificial strength in the market.
Buying and Selling
It is best to sell in winter and buy in spring. Marry any disconnect in time with a long settlement.
The reverse is a common and nasty trap though – buying in winter and selling in spring.
Knowing how the season impacts on the market can help you to avoid making a costly real estate blunder.
If you list your property onto the market as a “bought elsewhere, must sell” scenario in spring, the sudden softening in prices can catch you out.
Buying and selling in the same season (or economic environment) makes the sale and purchase “market relevant”.
Buy high, sell high and vice versa. It is when the market price ﬂows in a different direction mid-stream that serves as the greatest risk.
Each year, ﬂuctuating stock levels cause many buyers and sellers to misread the market.