Can You "Time" the Real Estate Market?

Can You Time the Market?

         Recently a neighbor of mine asked:  “Have we missed the opportunity to list our property and get a good contract this year?”  Almost every real estate agent I know answers that question with one of the following generalizations: 

1.       “Generally, we see more properties come on the market in the Spring, with a peak in sales and closings in June and July of each year. Why?  Because homeowners (and agents) believe that houses will show better in the Spring.  Many families with children also prefer to buy in the summer so that they can move and settle before the beginning of the school year."

2.       “If you list a property in an 'off-season' like the Fall or Winter, there may be less inventory and thus less competition for properties on the market.   Some buyers also perceive more value in properties in the market in the 'off season,' i.e., by assuming that listed property prices will be lower.”

       Although sometimes true, the above generalizations simply are not enough to make a decision about when to list a property in today’s market.   In my view, you need to consider the following factors in deciding the best time to list:

(1) The number of comparable properties sold in the past 6 months

(2) The number of comparable properties currently under contract

(3) The number of comparable properties still on the market

(4) The actual selling prices of recently sold comparable properties

(5) The time period any sold properties remained on the market

(6) The price changes for the properties sold

(7) Comparable properties currently under contract, their list prices, any price adjustments and the time period they remained on the market before going under contract

(8) Comparable properties still on the market, their list prices, any price adjustments, and the time period they have been on the market

(9) Comparable properties removed from the market, their list prices, any price adjustments, and how long they were on the market before being withdrawn from the market

The first 3 numbered items will tell you the most about the balance of the market - whether it is a “buyers” or “sellers” market.

With the above factors in mind, I decided to look at my own neighborhood (the Reserve in McLean, VA) and pulled the historical sales contract data for the past ten years.  Here is what I found.

Some years show peak numbers (of contracts) in the Spring, some actually show peak numbers in the Summer, Fall and/or Winter months.  Some showed no peak month.  In short, there does not seem to be any clear pattern.  No month stands out over others with more contracts.  Instead, I see a relatively even distribution throughout the months of the year and a different peak month, year to year.  Note that each year is different and there is no long-term consistency.

Of course, historical data does not always predict what will happen in future years.  Nevertheless, the above data in my own neighborhood confirms that you cannot assume that a particular time of year will always be better than some other time.   Instead, you must carefully evaluate (and periodically re-evaluate) the current market conditions outlined in the above-list.

It’s the only real way to “Time the Market” and get the best price for your home.

If you have any questions about this article or the real estate market in McLean, please feel free to contact me at 703-403-8225 or TaniaHosmer@gmail.com.