The conventional wisdom is true — home sales are cyclical. Listings surge in the spring and buyers more actively shop for new houses between March and August. The weather is nicer and families with children prefer to move before the start of a new school year. But is it the best time of year to buy or sell?
Prime season. For sellers, the seasonal demand drives up housing prices. And as more houses sell, the comparable prices rise driving prices even higher throughout the selling season. Higher comps also help when the buyer’s lender orders an appraisal to determine the approved loan value. Since the weather is nicer and the days are longer, customers are more apt to be out house shopping.
On the downside, more houses mean a greater supply and more choices for buyers. Therefore, if you are selling, you have more competition. If you are the buyer, the same thing applies. More people are shopping and the house you like may have other interested buyers.
Off season. Fall and winter are traditionally considered the slow season in home sales. Even though activity slows, that doesn’t mean opportunities don’t exist. In early fall, sellers will still benefit from the higher sales prices from the summer months. Plus, there are fewer competing homes listed, and some of the leftover listings may be left over for a reason. If you are selling a condo or townhome, your prime buyer is most likely a single person or empty nester, not pressured by the need to complete a deal before the start of school.
On the negative side, fewer buyers are shopping and they may try to negotiate harder, thinking the seller wants a fast sale. Another potential negative: Competing homes may be distressed in some way with sellers motivated to sell quickly at a lower price.