Spring has Arrived! So has the Buying/Selling Season.
Spring is hands-down one of the most popular times of year to buy or sell a home. With the weather warming up and people flocking outdoors, to the school year coming to an end, spring tends to be the time when the housing market rises. “Spring” in the real estate world starts in January – right after the holidays conclude – and peaks around mid-May. That doesn’t mean that there are no houses that sell during the summer, fall or winter months, but typically it does mean that more houses are on the market and more home buyers are looking to make a purchase.
Spring is one of the busiest times of year for the housing market. Does that mean it’s the best time of year for home buyers and sellers to enter the housing market? There are 4 key factors to consider when deciding to buy or sell a home in the spring.
- Home buying costs continue to rise
Between April 2016 and 2017 there was nearly a 12% increase in median house value across the state of Oregon. In comparison, the national average for this same 12-month period was 7.3%. Although house price appreciation is expected to slow slightly nationally, housing analysts expect home values in Oregon to continue to rise by 2%-3% extending through the spring of 2018. Those looking to buy a home in the next year should keep in mind that postponing their purchase may cost more money in the long run. Looking back at the first five months of 2017, the average rate for a 30-year fixed mortgage loan actually dropped from 4.2% in January 2017 to 3.95% in May 2017. Looking towards the spring of 2018, some real estate experts anticipate a gradual rise in mortgage rates (ref. 1). At Cascade Sotheby’s International Realty, our real estate experts understand that the best time to buy or sell a home is when the client feels confident in entering the housing market.
- Does weather play a role in the home buying and selling process?
After months of cold rain and snow, the sunshine and blossoms of spring are a blissful reprieve. As the weather gets warmer and drier, all key measures of housing activity spike. This includes an increase in searches, prices, starts, sales, and inventories, which tend to hit their annual lows in December (ref. 2). In January there are almost half the number of home buyers than in June (ref. 3). Starting in January, potential buyers begin their search, with search behavior peaking throughout March/April and staying high until August. In Oregon, June, July and August are the hottest months for online house hunting, based on a search traffic survey conducted from 2007-2012. In fact, 49 out of 50 states are 10% above their annual average in search traffic from March through July. Depending on where the transaction takes place, it’s important to be aware of the local market’s peak housing activity times. Home sellers may want to list during peak search times, while home buyers may prefer to search during off-peak times for a less competitive home buying experience (ref. 2).
- Gaining a competitive edge during the buying/selling process
Spring is largely regarded as the best time to enter the housing market, which also means that there is an increase in market competition during that time. With more people looking to buy, the market becomes more competitive. As a home seller, spring provides an opportunity for more interest in your property, although listing your house in late spring will also result in higher inventory levels (ref. 2). Winter home buyers will find lower home prices and less competition, although they will only see 79% of the housing inventory that home buyers see in the spring. However, a low inventory of homes may mean home buyers will spend more time shopping for the home of their dreams (ref. 3).
- Entering the housing market with a purpose
No matter the season, there are life events that require a home buying or selling experience. But for home buyers who aren’t influenced by a major life event, spring’s essence of new beginnings can inspire new transactions. “Spring” in the real estate world occurs from roughly January to July. Real estate and home building experts explain that an emphasis on the spring home buying season has its roots in practical reasons. For example, it fits nicely with the school calendar, allowing for a smooth transition when moving with kids.
As a home seller during spring, its crucial to identify less focused buyers who are just out to browse. Although the spring air may boost the attendance at an open house, the number of serious home buyers may still be limited. Whether buying or selling a home, in many cases, the best way to determine when to begin the process is to decide on the end date. On average, it takes about 30 days to close a sale. If taken into account the time it will take to find a dream home, a home buyer could easily be looking at 60-90 days going through the home buying process. If time is a factor, begin with an end-date in mind and work backwards from your date set goal (ref. 3).
Developing a solid understanding of some of the factors that play a role in the housing market will help home buyers and sellers choose the right time of year to enter the housing market. Spring may be the most common time of year for house shopping, with high levels of search activity, warmer and drier weather, and a potentially more competitive sale prices, but homes are sold year-round. Keep in mind that shopping for a home in the spring will lead to more competition with other buyers and potentially higher housing prices, while shopping during the winter months might bring you a better price on the property, but less inventory to choose from. If you have questions, don’t hesitate to contact a real estate expert at Cascade Sotheby’s International Realty.
References:
1. Shane, Michael. Sammamish Mortgage. “Outlook: Oregon Home-Buying Costs Expected to Rise Into 2018.” 31 May 2017. Web. 20 April 2018.
2. Kolko, Jed. Citylab. “The Best Time to Look for a House, By State.” 30 Jan 2013. Web. 20 April 2018
3. Umberger, Mary. NewHomeSource. “When is the Best Time to Buy a New Home?” Web. 20 April 2018