Housing Markets Seasonal Pricing
It's fact; housing markets are inherently local, with seasonal pricing and sales volume patterns that repeat every year, especially in colder-weather markets. That pattern is evident when we look at single-family home sales volumes for the five years prior to 2020
In 2020, the COVID-19 pandemic shifted sales activity into the latter half of the year. The latest sales data from Black Knight’s Collateral Analytics suggest we’re returning to a more 'normal' seasonal pattern this year.
Extremely low-interest rates, stimulus funds, the current stock market, increasing mobility for remote workers all contributed to keeping sales well above normal. These trends stay as lower-than-normal housing inventories continued to drive prices upward. Though mortgage rates have moved up slightly, they are still at a historic low, and many markets remain affordable by long-term measures.
Still, home prices remain relatively high overall.
Note, new-home sales tend to represent about 15% of overall sales. Contributing factors in today’s home values is supply chain issues that have impeded new home construction and shortage of land available for purchase. In the intermediate- to longer-term, there is also a shortage of new construction, especially in coastal markets, in addition to material and labor shortages.
Although the seasonality of sales volumes is well-established, home prices also exhibit seasonal fluctuations – sometimes quite pronounced – especially in northern markets where cold weather can literally put a chill on demand.
Implications of price seasonality
Buyers who have the flexibility when they buy may want to shop for homes during the late fall/early winter months. These months pose an opportunity for the best prices and lowest competition. Sellers, on the other hand, may want to wait until mid-to late-spring to list properties for sale. Appraisers who aren’t already adjusting for seasonal price fluctuations may want to take such factors into account when comparing sales occurring at different times of the year.
Information of Graphics provided by BlackKnight Data and Analytics tools