Just like buying a home is one of the biggest purchases many people make, putting your home on the market may be one of the biggest sales you ever make. In the Vancouver-area market, the median home price for properties sold in Q1 2023 was $556,800, and for homeowners who purchased their home three years ago, they saw an equity gain of over $140,000. With all that money on the line, variables such as the move-in-readiness of your home, the listing particulars your realtor publishes, and even the date you put your home on the market can have a significant impact. In this article, we zero in on that last particular factor: home sale seasonality. Take a closer look at how the season when you decide to sell your home can impact the price, how the season can influence the buying process for prospective buyers, and best practices for anyone on either side of a real estate transaction.
Is there such a thing as seasonality in real estate?
Like every market, the real estate industry has peak and off-peak seasons. For example, spring and summer are the most popular months for prospective buyers to start exploring homes, putting in offers, and closing on new purchases. There are a variety of reasons for this, such as:
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School is out for the summer, giving families a wider window of time for a major transition, such as moving to a new state.
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Prospective buyers and their inspectors can better assess all the details of a property, such as exterior details and HVAC performance, during the warmer months.
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Fall and winter are often busy with holidays, school work, and busy commercial seasons, making most people too busy to make a purchase when they don't immediately need to.
Just like there are a variety of rationales powering this trend, the scale of its impact can also vary in intensity and effect. In balmy states like California and Florida, seasonality has measurably less impact; buyers can tour homes during any season (though school semesters can still have an impact). In areas with more diverse seasons, such as Vancouver, the cold winters and warmer summers increase the significance of home sales seasonality. As a result, it can impact the sales price, the time the home sits on the market, and even what types of repairs or concessions are requested during negotiations.
How seasonality impacts home sales
Seasonality can directly impact the sales price, especially in regions where seasonality is more impactful. Both buyers and sellers should expect to see larger listing prices and final sales prices. Based on market activity across the past decade, homes sold in May, June, or July are sold at a premium, with the final sales prices being 10% higher than they otherwise would be. In fact, May 23 is historically the best day to sell. Here are a couple of reasons why this might be the case:
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It's the perfect time: If an offer is accepted near the end of May, the transaction will close near the end of June. That's a great time to move out of one home, move to another, and settle in before the start of the school year or the arrival of cold weather.
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There's a lot of competition: More buyers are searching for homes, which will naturally stretch inventory a bit thin. While home sellers have also picked up on the summer peak season, there's still more demand in most markets. To make offers stand out from the crowd, many buyers will make an offer that's slightly above the list.
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Homes simply look prettier: Curb appeal matters. During the late spring and early summer, plants are blooming, the sky is bright, and home interiors are brightly lit and sunny. There's less mud, less of a chill, and more of a positive atmosphere. It may seem silly, but this can brighten the prospects for any home.
Conversely, of course, this means homes on the market during the off period may see a bit of a sales price slump. Fewer people are looking, meaning buyers don't have to compete as much on price. In today's real estate world, it may still be a seller's market, so the effects of winter seasonality are less severe. But it's still worth factoring into any home buying or selling strategy.
Navigating the seasons: Best practices for sellers
Once you know the basics of how seasonality can affect the market for sellers, it's time to consider your own personal approach. Here are some key best practices for optimizing the sale of your home:
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Work with a realtor as soon as possible. They can provide market data to measure the impact of home sales seasonality in your specific neighborhood and advise you on the next steps. Even if you ultimately decide to sell in the spring, a realtor will still help you now.
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Decide your priorities when it comes to speed, convenience, price, and timeline. Your realtor will work with you to achieve the most ideal outcomes across all four factors, but you need to know which one matters most. For example, you might be moving for a job and need to sell your home immediately, or you might be downsizing and can wait for the best possible moment.
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Consider negotiation elements beyond price: Leasebacks so you can comfortably find a new home, contracts with minimal fuss and disruption, and trustworthy buyers who are unlikely to back out may matter more than price alone, and your realtor can create offer instructions that relay this to all the buyers' agents in the area.
Navigating the seasons: Best practices for buyers
Similarly, there are best practices that buyers can use to take advantage of seasonality. Consider the following:
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If price matters most, wait: When you're not in a hurry, consider waiting until the off-peak season. Sellers might not sell at a hefty discount, but you're less likely to compete with as many other buyers.
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Know why seasonality matters: Consider the factors that drive seasonal demand and whether they apply to your situation. This can help you gauge properties and ensure you put together offers that make sense for your individual needs.
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Don't be afraid to get competitive on price if you're in a hurry: When you're on a tight timeline in the summer, understanding the market helps. Look at multiple homes, put in offers quickly, and be ready to offer a little extra if it makes sense for your budget.
Get a closer look at home sales seasonality and the market in your favorite neighborhoods with David Merrick
Creating a buying or selling strategy early on is key to getting the outcome you want in the real estate market, whether it's winter or summer. Working with an experienced local realtor can help. David Merrick has years of experience helping both buyers and sellers navigate the market throughout every time of year. Reach out today to discuss your budget, timeline, and preferences. Let David work with you to create a personalized buying or selling approach that takes home sales seasonality, local market trends, and your long-term interests into complete focus.
*Header photo courtesy of David Merrick