It's real estate season -- or is it?
Ah, glorious spring, a time for fresh starts and positive
Across Canada and the U.S., for-sale signs crop up
like wildflowers on the lawns of subdivisions. Moving sales proliferate.
Moms and dads box up their possessions and ponder what awaits them
on a new block or in a new town. Kids finish out semesters, wary
that a different school culture and a new set of friends await them
in fall. It's a rite of spring and early summer in our transient
It's also a time when real estate agents get lightheaded
from make-hay fever, as buyers and sellers come out in full bloom.
But is it always the best time to buy or sell a house?
That's a definite maybe, say experts. Like most buy-sell
situations, it all depends on motivations.
Indeed, according to historic data from the U.S. National
Association of Realtors, April through July outpaces the balance
of the year in sales. So there'll surely be more home inventory
and variety then. But you better move fast, because that's just
what other home hunters are doing.
"It starts building up early in the year but
peaks around June," says research economist Jack Harris of
the Texas A&M University Real Estate Center. "There's school
ending, there's vacation time and the weather is also nicer. It's
generally just a good time to get out and look at homes."
Many buyers apply their income tax refunds toward
down payments, adding to the spring push.
While the buying frenzy stays steady through most
of the summer, it drops off in early fall, says Harris. It usually
drags for a month or so, and then escalates briefly again around
October. Some of that second spike is attributed to sellers who
were overly optimistic pricers in the spring, but who have grudgingly
decided to make concessions in the fall, he says.
According to the Canadian Real Estate Association,
buying patterns follow a similar trend north of the border, peaking
in April and May, as buyers prepare for July 1st, Canada's biggest
moving day. Sales then slow during the summer and begin rising again
in early fall. For obvious reasons winter months are the slowest.
Some seasonal house-hunting hints:
- Be a contrarian. True, there's a greater choice of homes
in the spring, but sellers then can better hold to their asking
prices because of demand. "If you can stand to be a contrarian,
it could pay to wait," says Harris. "Most people don't
do that, though. They just get carried along with the crowd."
Additionally, when home loans are less in demand, some lenders
are willing to forego certain fees typically charged to win off-peak
- Off-season dealing: Sellers in late fall and early winter,
especially between Thanksgiving and New Year's Day, are often
more motivated to deal, real estate agents say. "I've done
my best negotiating from October to December," says Jim Crawford,
a real estate agent, lecturer and Web consultant in Roswell, Ga.
"You don't want lots of people tromping through your home
around Christmas time ... so you're more apt to accept an offer."
- Window at summer's end: Sometimes, late summer opens
a small window of leverage for buyers dealing with sellers of
slow-moving family homes, says Crawford. "You usually find
that the family ... is more important than the extra dollar."
- Some sellers can wait you out: Empty nesters and single
sellers will always account for some off-peak housing stock, but
they're often less motivated to sell quickly, Crawford says.
- Heed non-cycle or short-cycle markets: Parts of Florida,
Colorado and California and other regions of the U.S. that have
large resort areas or large numbers of retirees and semi-retirees
don't follow the traditional sale season. Winter resort areas
peak in sales between January and April, according to agents.
In northern climates, the wintry elements can compress the annual
peak seasons more to their warmest-weather months.
- Tax timing: It can play a role if you plan to buy late
in the year. Determine through a tax preparer if the deductions
will better fit in the current or future year. If need be, try
to close Dec. 31 rather than Jan. 2, or vice versa. (Be sure you
know which items of your closing will be tax-deductible and which
will be added to the value of the property.)
- Opportunism: While it may sound ghoulish, layoff announcements
or a planned corporate headquarters move in some markets can soon
result in more homes on the market for the short term with a variety
of price points and some motivated sellers. Proceed with sensitivity.
Home-buying "seasonality" can vary from
market to market and may be slowly shifting, say trend trackers.
In recent years, January has seen record or near-record sales for
the month, says National Association of Realtors researcher Walter
Molony. A buyer's market in a city will mean more inventory is available
year round, while a seller's market, generally driven by local employment
opportunities, can winnow peak seasons significantly
However, most agents agree on the seasonal axiom
that homes generally sell for 3 percent more than the annual average
during peak months, at or around the average annual price in very
early spring and in fall, and then drop 3 percent below the average
annual price during winter.
A few other seasonal-selling strategies:
- Sell to a larger market: In most areas, May, June, July
and August are considered the high-volume closing months, with
about 40 percent of all homes selling during that four-month period.
- The sooner, the better: While deed transfers do peak
between May and August, most of those sales were actually arranged
from one to three months earlier. It takes time to close home
- Holding out: Your wait could be a long one. A home priced
unreasonably high can be hard to sell in any season, particularly
in a buyer's market. Industry statistics show homes with price
tags 5 percent above market value have a 10 times greater chance
of selling than those priced 15 percent above market.
- Reduce selling stress: Placing your home for sale as
far in advance of buying the new one as possible will help remove
one component from the already complicated sales equation. You
don't want to wind up juggling two mortgage payments in addition
to the other exasperation associated with home selling. But don't
tarry too long in visiting your targeted buying area, lest you
miss its peak inventory season. (You may have to send your spouse
out as a scout while you hold down the home fort.)
- Get inside the buyer's mind: See seasonal house-hunting
tips (above) and adjust strategies accordingly.
Buyers and sellers should also note that 60 percent
of all moves in America take place in summer, according to JoyceVanLines.com.
Book as early as possible, especially if you have a clear closing
date. Joyce and other movers advisehome buyers/sellers to call for
an estimate at least 60 days in advance of a move.
Even with reliable spring sales peaks, the Internet
has added a non-seasonal dimension to the home-buying mindset. Virtual
tours, accompanied by a wealth of neighborhood, school and civic
data, can speed along the decision-making process well before a
prospective home buyer hits town, agent Crawford says. "It
is literally open house, 24-7, on the Web."
In markets such as weather-friendly Southern California,
seasonal factors play a much smaller role in home-inventory turnover,
agents say. Terri Dillon, who owns four Realty Executive offices
in the San Diego area, says house hunting is a year-round sport
in her market, although spring still carries a slight edge.
However, at year's end, says Dillon, investors who
sold off residential properties midyear are often in a hurry to
close on the purchase of another investment residential property
to satisfy requirements of a capital-gains deferring 1031 exchange.
The IRS gives you 180 days from the date of your last property's
closing to close on another real estate investment to defer the
previous gains tax. This is less of a factor in Canada where the
concept of replacement properties has long been phased out of the
Knowing the motivation of the seller can be very important
in the sales process, says Realtor Susan Marthens of Windermere
Services Co. in Portland, Ore. "If they're transferring, they'll
want to get it out on the market quickly," she says. "That's
something people can't always control. Sometimes they'll have to
She adds: "But if a particular time of year isn't
important to the seller ... then I always tell them, 'Right around
Steve McLinden is a freelance
writer based in Arlington, Texas.
Peter Diekmeyer is an independent
business journalist based in Canada. He is the Montreal Gazette's
management columnist and writes regularly for numerous Canadian