- As “everyone knows”, spring is the strongest season for real estate sales, in terms of both the total number of homes sold and the average selling price for those homes. The spring season doesn’t start on March 21, however… it starts in mid-to-late January. Buyers are eager to get back out there looking for homes soon after the holiday season is over, though many sellers want to wait until the weather warms up and the lawn & gardens start to look good. The result is that February is often a very hot month, with lots of buyers and not enough sellers. The strong spring season lasts for about 5 months, until mid to late June.
- The summer season starts “officially” on the July 1 weekend, after which many buyers and sellers take a break from real estate to enjoy the warm weather while it lasts. The summer market is typically very “thin”, meaning that the ranks of both buyers and sellers thin out significantly. Fewer homes are for sale, fewer buyers are looking at them, and both the number of homes sold and the average price of these homes fall relative to the spring market. It might seem that the summer would be a great time to shop for a home, and indeed there are occasionally some good summer deals to be had… but the drop in average prices is more due to the average quality of the homes on offer than to a real drop in prices. There are lots of “picked-over leftovers” during the summer months, and most sellers try to avoid putting their home on the market at this time as “everyone knows” it’s better to wait until the fall.
- The fall market starts right after Labour Day, when summer vacations are over and the kids are all back in school. Prices climb in September and October, and remain strong at through most of November.
- By early December, however, many buyers and sellers are well into holiday season mode and take a break from real estate until the new year. The pattern is very similar to the summer months: there is a drop in both the total number of homes for sale and the average selling price in December and January. “Everyone knows” that the holiday season is a bad time to sell.
The chart below shows this seasonal pattern quite clearly: two slow periods, July/August and December/January; and two strong periods, February to June, and September to November. You can just about set your clock by it. We are now entering the holiday season, and both prices and sales are beginning to fall as expected. The average price for the first half of this month is only slightly higher than at this time last year, consistent with the gradual moderation in the market that we have reported on in previous months. So far, the world is unfolding as it should, and a “soft landing” next year (with prices continuing to increase but at a much slower pace) still seems like the most probable outcome. In the meantime, let’s enjoy the holidays!