It comes as no surprise to those in the real estate industry that there is a seasonal pattern to home sales data. This concept is also easily understood by those outside of the industry who can picture families with school-age children preferring to purchase homes and move in the summer flooding the market during those months so as to avoid disruption to education. It is also easy to picture singles, young couples, or empty nesters remaining in the market regardless of the season. While there are undoubtedly other potential explanations behind the seasonal pattern in home sales, one does not need to understand all of the possible drivers of a seasonal pattern to understand that it exists.
As REALTORS® in most parts of the country would know, the completion of home sales are strongest in the late spring and summer months as compared to the winter months. January and February are two months with the lowest number of home sale closings because few buyers shop for homes between Thanksgiving and the New Year.
The below graph clearly illustrates the seasonal trend of total completed sales. The peak months can see as much as twice the sales activity seen during the weak months.
The data frequently reported in the media and as reported by NAR for monthly sales is not the raw count of sales but seasonally adjusted figures. That is how all economic data are reported. It would be foolish and not meaningful to say sales are tumbling or jobs in beach towns collapsed in December, if in fact it is a very normal seasonal pattern. And the seasonally adjusted data has been showing a slight improving trend in home sales this past November and December.
Still, from the homeowners’ and practitioners’ points of view, the seasonally adjusted data do not necessarily mean an easy home sale or a higher commission income in winters’ months.
Here’s a USA Today article on how to sell a home in winter. You may not agree with all of these suggestions and/or you may have your own special method.
The number of existing homes-for-sale has fallen to 3.5 million in September. Expect another 15 percent dip by winter if past normal seasonal patterns hold. Inventory in December and January tends to be the lowest of the year, so there could be only 3 million listings by this winter. That represents a steady chipping away at the bloated inventory of 4.5 million homes-for-sale that we saw over many months in 2008. At such a declining inventory level, home values should show definitive stabilizing trends.