As we approach the beautiful summer months here in Southern California, the big word you will start to here in real estate is the “busy season”. Why do you always hear this? Because the common knowledge is that spring is prime time for those looking to buy or sell. Think about buying a car. When do they tell you is the “best” time to buy? You are usually told to buy a car at the end of the year (and month) to get the best deal. Does this mean its the only time you can buy a car? No. Does it mean you can’t get another time during another month?
Real estate is no different. In this blog, I took to expose the truth about the busy season and explain the pros and cons of potentially doing your real estate transaction during another season. My goal is to stir you away from headlines that encourage you to do to take action without really explaining why it might benefit you to wait.
Why Is It Popular To Buy?
Simply put, during the spring you are going to have larger inventory to chose from. As you buyer, when you are looking for a home you are going to be able to find more houses in your very specific search criteria.
Do the numbers back this up?
According to Realtor.com, the Riverside, CA area has seen an 11.3% listing increase month to month, with a total of about 20,000 listings on the market right now.
Some agents just leave those statistics at that, which is fine. But an agent with your best interest in mind should tell you that this also means competition will be higher. Expect more bidding wars and houses to be on the market for less time. If a house you want has multiple offers, they are less likely to take “low ball” offers. More inventory obviously means more houses to buy, but more competition might take away any chance of getting that great deal.
This spring is being said to be extra hot. Purchases of new, single-family homes jumped 16.6% in April from a month earlier¹.
One of the big seasons for a spike in inventory during spring and summer is the weather. However, in Southern California, that is not as big an issue. We see great weather almost year round. But think about a state with a harsh winter. People will less likely be showing up to look at your house packed in ten feet of snow. This is why I caution people to not be sold on reading random facts they see online. In Los Angeles for example, there is on average 284 sunny days in a year. Do you think there is going to be much of an “off-season”?
You do not have to worry much about weather here, but schools still will play a major factor. Families move during the summer because the kids are home.
If you live in a city or neighborhood with less families, then remember to plan accordingly. Someone selling their home with no kids will not be waiting till summer to list their home if they are needing to sell faster.
Why Should I Sell?
Before I go into general terms, lets look at what the data says about the market today.
As someone looking to sell, the market trends would suggest now is one of the best times. When the market is “healthy” it means that those who took a hit on their home value before have most likely recovered.
What does this data tell you about reasons sellers are looking to move:
1. Want to be in a different neighborhood (40%)
2. Need a home with different features (28%)
3. Need a bigger home (22%)
4. Want location with better weather, views, and/or lifestyle (19%)
5. Need to lower cost of living (17%)
A healthy market means that sellers are going to often want to do a sell-buy scenario. The biggest obstacle for sellers in this situation would be finding a capable replacement home. I would think this would easier given the information I just stated about inventory.
Waiting to sell during peak season probably means more offers and less people coming in below asking price. Just remember when is peak season where you live. The bell curve for places in warm weather is much more flat.
I believe the best time to buy a house is when its right for you. For example, are you on a tight budget? You could settle on a house AFTER “peak” season that did not sell. A house that does not sell during the spring or summer will almost certainly get a price reduction. Are you looking for very specific things in your house? Now might be good because inventory has gone up compared to other times a year (although its still limited in the big picture).
Personal factors should get a higher priority over the season. It would not make much sense to throw your house on the market just because its “busy season”. Market analysis needs to be done on the selling price and it needs to be completely ready to list.