Understanding Seasonal Trends in Home Prices

As consumers, many of the goods and services we buy and sell have prices and values that fluctuate based on the season. For example, you may be able to score a better deal on a speedboat in the middle of winter than if you were to buy it in the spring or summer. Why? Well, because more people want to buy a boat in the Spring/Summer so they can enjoy it right away versus dealing with seasonal storage and waiting for the ice to melt. The idea of a cool lake breeze on a hot summer day is one that drives demand and  justifies a slightly higher price tag. The psychology surrounding supply and demand is the main driver of these seasonal fluctuations, and the same principles apply to real estate.

Seasonal changes can have a notable impact on home values and prices, largely due to fluctuations in demand, supply, and market conditions. Here’s how different seasons typically affect the housing market:

 Spring (March – May)

• Peak Selling Season: Spring is often the busiest time of year for real estate transactions. The warmer weather encourages more buyers to look at homes, and many families with children want to settle into a new home before the next school year.
• Higher Prices: With increased demand, home prices tend to rise during spring. Sellers often receive multiple offers, which can drive up the price.
• More Listings: Inventory is generally higher, giving buyers more options, but competition can still be fierce.

Summer (June to August)

• Continued High Demand: The summer market remains active, particularly in June and July. Many families continue to buy during this period to settle before the fall.
• Price Growth May Slow: As the season progresses, demand can taper off slightly, particularly in hotter regions. Prices might stabilize or grow at a slower pace.
• Increased Competition: While more homes are listed in the summer, competition can still be tough, keeping prices relatively high.

Fall (September to November)

• Decline in Demand: After the busy summer season, the number of buyers usually drops in the fall. Fewer people are looking to move as school begins and holidays approach.
• More Negotiating Power for Buyers: With fewer buyers, sellers may be more willing to negotiate on price. Discounts or concessions can become more common.
• Price Stabilization: Home prices tend to stabilize, and the market becomes less competitive, offering opportunities for buyers to find deals.

Winter (December to February)

• Slowest Time for Sales: Winter, especially around the holidays, is typically the slowest time for the housing market. Weather conditions in colder areas can also limit the number of showings and open houses.
• Lower Prices: Sellers who list their homes in winter are often motivated, leading to lower prices. This can present opportunities for buyers to negotiate better deals.
• Fewer Listings: Inventory is typically lower during winter, meaning buyers have fewer options, but competition among buyers is also less intense.

While these trends are mostly consistent throughout the country, it’s important to note that local climates can influence these seasonal effects. For example, a harsh mid-west winter might slow down the local housing market more so than a California “winter”. It’s also important to consider economic conditions as they may work with or against the seasonal trends to influence home prices. For those buying or selling, understanding these seasonal trends can help determine the best time to enter the market based on goals like getting a good price or maximizing exposure.

Regardless of when you decide to enter the market, it’s important to have a team of local experts on your side. When you work with a Summit Loan Officer, they will help you navigate the home financing process with your local market characteristics, seasonal trends and unique circumstances in mind.