The Seasons of Real Estate

Timing is Everything...

We heard the case for Spring, but it could be argued that Fall is the best time, people want to get into their new home for Christmas. Or maybe winter is the best time to make a move as there is even less competition and buyers are more serious or maybe they lost out on other homes due to multiple offers. Remember, the value of any home is what a Buyer is willing and able to pay and what a Seller is willing to sell for - no matter what time of year!

So what are some factors in the timing of the Real Estate Market:

Motivation: Why are you selling or buying? Is it a job transfer, new home construction, downsizing, upscaling. Whatever the motivation it plays a key factor in when the property goes on the market to the buyers.

Supply and Demand: By definition, the “Law of Supply and Demand” is a theory that explains the interaction between the sellers of a resource and the buyers for that resource - our resource is Real Estate.

Sellers Market: When the supply of homes available to sell is low and the Buyers demand is high- right now in Houston we are averaging 1.8 months of homes to sell. So, the Sellers are in the best position to gain the most return on their home investment. The demand for the property is higher than the supply!

Buyers Market: When the supply of homes for sale is high compared to the number of buyers in the market...the supply of properties is higher than the demand. This tends to drive sale prices down and Buyers have more power both on negotiation of price and concessions requested.

Balanced Market: When the supply and demand are about the same, we have around 6 months of Inventory on the market at any given point. This is where the Buyer and Seller are on more even footing for prices and concessions. Buyers with reasonable offers are more acceptable to Sellers

Interest Rates: When our Mortgage Rates drop we see Buyers able to purchase more home for their money. This is a valuable determining factor in the Real Estate Market.

Timing by month:

Let’s look at the Stats from the Houston Association of Realtors for 2020:

So, the lowest number of closings was in January and April, with the highest closings in July, June and August. Remember most Buyers start their buying process about 3 months before and it typically takes 45 days to close once there is an executed Sales Contract. One of the surprises may be the large number of sales in September, October and December.

So, does Real Estate Have a Season?

Yes and No. People are always moving - whether it’s for work, moving to a home from a rental, moving into a larger or smaller home based on family needs. There truly is no ‘bad’ time to move. Enjoy the journey!