Traditionally many real estate markets “cool” off starting in October. It becomes especially noticeable after mid November through about mid January. Reasons for this vary by market of course. Here in Southern California the largest motivators for the slowdown appear to be related to the holidays (hosting events, and the many expenses associated with the holidays in general) and the weather (people tend to stay indoors more when the season changes, and want to limit themselves to germ exposure in their homes). It is common within our industry to prepare clients for a conversation on this subject: that sales activity will be slower than average to our sellers, and that only the most motivated of sellers sell during this window to our buyers. We also tend to see a lot of “fixer uppers” hitting the market in the 4th quarter as Trust/Probate sale activity increases. The holidays and changes in weather tend to lead to a spike in our older residents moving on to the next place, so it is normal to see more of those types of sales occurring too.
If you have the option of waiting until about May to list your home we encourage our clients to take the risk and wait. Why May? That’s when the market tends to heat up in many areas especially in relation to family sized homes. Many larger homes have children in school, so they don’t want to disrupt their studies. They will wait until May/June before listing so that they can purchase a new home before August (taking advantage of “summer break.”) This is primarily the largest reason why most sales in our local markets close escrow between June and August. It is impossible to “time” the market to your absolute advantage, but being aware of these seasonal changes may help you develop the proper strategy to increase your chances of more success. You must also be mindful of interest rate trends as they also impact the home values to some degree that varies strongly by area as well. We have found that predominantly “first time homebuyer” communities get hit very hard when the rates go up. Affordability issues hit every community differently, so it is important that you consult with real estate professionals familiar with market trends in as many areas you’re interested in as possible.
If you’re thinking about selling our advice is that you consider listing between May and July, and if you’re thinking about buying you should consider checking out the inventory between November and January. You should have the best results, assuming traditional market conditions, during those timeframes. It is important that you contact a local real estate professional in your target market because they’re all so different. Even here in Southern California you won’t see the numbers align equally between many cities. The activity in Covina could be entirely different than what we’re seeing in Huntington Beach. Just as sales could be extremely slow in most of San Bernardino County they could be quite strong in Orange County. Even without the many local counties, there is so much diversity in market conditions between the many cities that neighbor each other. Never assume that real estate is a “universal” term with universal conditions.
Every market will have its seasonal challenges and opportunities, so it would be wise to explore them depending on what shoe you’re wearing: that of a buyer, of a seller or both. We have helped a lot of clients find a sweet spot for their real estate needs from the San Fernando Valley, to the San Gabriel Valley, all the way down to San Diego and back up through Fullerton and Los Angeles. We have done business in more areas than most agents, so our team is not limited to a region. Contact your favorite real estate professional or give us a call for a second opinion. We would love to discuss how you can benefit from this information in “real life” at no cost to you. We guarantee you’ll learn something new, and we hope to create additional value in all matters regarding real estate in Southern California.