There is a general myth in real estate. A myth that says real estate market activity is seasonal, that there is an off season. It’s assumed that real estate activity is like baseball: things wind down in October, take the winter off, then restart again in spring.
But this is simply not true. Yes, the summer may be busier than other seasons. But as the data shows, real estate activity continues through every season.
Is there Really a Real Estate Off Season?
Busting the Myth: Monthly Inventory
A major portion of the real estate off season myth is based on inventory. According to the myth, during the off season there are fewer homes for sale. This essentially forms the foundation for the myth as a whole. If the myth is true, and the fall, winter, and early spring months are an “off season,” then we should see a significant reduction in inventory during this time.
But if we look at the data, we see that there is only a slight change in inventory during the winter months. We can pull from a variety of sources to find available listings, including Zillow, one of the largest real estate websites in the world. Zillow provides data on available listings on the last day of each month, providing a snap shot of total home listing activity.
If we simply look at the total available listings at the end of each month during 2019, for example, we see these numbers:
|
January |
1,510,325 |
|
February |
1,461,831 |
|
March |
1,508,545 |
|
April |
1,575,154 |
|
May |
1,667,694 |
|
June |
1,739,557 |
|
July |
1,784,358 |
|
August |
1,795,002 |
|
September |
1,776,024 |
|
October |
1,745,775 |
|
November |
1,671,857 |
|
December |
1,555,223 |
When looking at these numbers, we can make some general of conclusions. Granted, this is data from a single year, but it shows that while total inventory drops slightly during the off season, it’s hardly a drastic drop. At the lowest point (February), there were roughy 1.46 million listings across the country in 2019. At its highest point, it almost reached 1.8 million, an increase of roughly 250,000 available homes. Yes, a quarter of a million properties are certainly a lot of inventory, but it’s not the drastic rise and decline that you would expect if you believe the real estate off season myth.
Even when we look at other years, we see similar trends. Using the same data set (nationwide end-of-month listings from Zillow) but shifting to 2018, we see similar numbers. At the lowest point, 2018 had roughly 1.39 million listings at the end of February, while there were about 1.78 million listings at the end of August. Again, this could be construed as evidence for a real estate off season, but it’s hardly the drastic decline this myth evokes.
But inventory is only part of the myth. The other part is that there are fewer buyers actively seeking homes during the off season. Does this part of the myth hold up to scrutiny?
Busting the Myth: Buyer Competition
What about buyer activity during the so-called “off season?” Part of the overall myth is that there are fewer buyers actively seeking homes, and therefore the people who are searching for properties can get a better deal, as they face less competition for available houses.
It’s hard, however, to estimate buyer activity, as it’s a bit less formal than active listings. To list a home for sale, it essentially needs to be registered with real estate groups and websites. (It can be done, but’s hard to sell a home without this step.) No such activity is required for buyers; you don’t have to register your intent to purchase a home, if you want you can simply start shopping without informing anyone.
However, mortgage application numbers provide a good base for this factor. If less people are searching for a home, then mortgage applications should be down. But we rarely see this play out. Our team stays busy throughout the year, and the national data does not indicate a significant decline in mortgage activity during the winter.
What About “Cold Weather” Markets?
In warm weather areas like San Diego, the real estate market can keep churning throughout the year. Although seasonal changes like the school year, holidays, and summer travel season can have an impact, it seems fair to say that the weather really won’t play a role in determining people’s activity.
But what about cold weather areas. Maybe the real estate off season myth started in areas where the winter really can halt real estate sales, and this trend, while real in some regions, has simply seeped into the national thinking as a whole. Let’s take Hennepin County in Minnesota, the home of Minneapolis and the most populous county in the state, as an example. This region, which is certainly subject to the harshness of winter, does see a rise and decline in active listings throughout the year, but it’s not drastic. In 2017, the peak number of listings was September, with roughly 3,500 listings, the lowest came in December with roughly 2,200 listings. Similar numbers were seen in the following years.
Okay, this says something, as active listings fell by roughly a third. But there are still plenty of homes available. It hardly indicates that you can’t find a quality home during the so-called “off season.”
Overall, the message seems clear: if you are ready to buy, you should start the process, regardless of the season. You won’t be able to purchase a home for 20% under value in February, but you will find plenty of available houses. From a buyer’s perspective, your experience will be more or less the same in September as it will be in November, February, or July.
Your personal readiness to buy is far more important than the season!
Find the Right Mortgage for Your Purchase
If you are ready to purchase a home, there’s no better time than the present. While seasonal factors may impact your purchasing experience, the market is expected to continue climbing upward; if you wait, you’ll likely be paying more for your future home.
Contact us today and let us help you purchase a top-quality home with a loan that fits your specific needs!
