Will Real Estate Seasonality Impact Our Red Hot Real Estate Market?
Now that August has come and gone and September is midway through, all of us long-timers are wondering how real estate seasonality is going to impact the red hot Tallahassee real estate market.
When we reported on year over year home sales, July was up 25% over July of last year, and August was up 24% over August 2015. And this was following a June that was up 20%, so I would say we had a very strong Summer.
But seasonal changes are real and they typically follow a consistent pattern. Generally, people like to move in the Summer months, as it fits family schedules better than cooler month moves.
Yet with all that being said, would you be surprised to discover that it is actually easier to buy a home and sell a home when both the weather and the market have cooled off?
Real Estate Seasonality In Tallahassee
If you are wondering what the impact of seasonality will be on the real estate market in Tallahassee over the next few months, you might find what follows to be both comforting and surprising.
First of all, it is true that history has shown that we should expect fewer buyers in the months from September through February.
This means that the industry slows down. Fewer mortgages are written. Fewer title insurance policies are written. And fewer real estate contracts are written.
But did you know that the number of listings on the market also is fewer during these months?
So it's not actually "harder" to sell a home during the "slower" months because there are fewer sellers competing for the reduced number of buyers.
In fact, you might argue that the best time to sell a home is during these "slower" months, as all service providers have more time and fewer other customers that are seeking their attention.
The Right Time Of Year To Sell A Home
In order to determine if there is a best time of year to sell a home in terms of the percentage of the listing inventory which sells, I have compiled information from six years of home sales in the Tallahassee real estate market.
I examined all homes that were listed during that time and compared it with the contracts that eventually closed from each month. For example, if there were 2,000 listings in January 2010 and 200 closing eventually occurred from contracts written in January 2010, then I would record the fact that 10% of the inventory went under contract. This was done for each month from January 2009 through December 2014, and the median of these results were used to create the real estate graph below.
In a sense, we can say the graph above shows a home seller the "odds of selling" each month of the year.
- Two months stood out above all others, April and June, where more than 11% of the inventory sold each month.
- Four months stood out below all others, January, February, September, and November, where only 7% to 8% of the inventory sold.
- Six months spanning throughout the year showed a little more than 10% of the inventory selling.
I believe the impact of seasonality on a homeowners ability to sell a home is negligible at best.
The Property Search Tool You Use Really Does Matter
Somebody recently asked us to perform a scientific analysis to discover the best property search tool for Tallahassee. We have provided a short video of our findings below.
I hope our report on the impact of seasonality in real estate provided some insight on market timing (meaning buy or sell when it is most convenient for your family).