When looking back, the pandemic-driven housing market in 2020 may have been an outlier. A series of rare, highly unusual events conspired to create a home selling market unlike any before seen.
Instances of extremely high demand, fueled largely by people reevaluating their housing needs; historically low interest rates, buoyed by a Fed hoping to avoid a repeat of The Great Recession a decade prior; unusually low housing supply, thanks to a near standstill in new starts; and an unwillingness to list from current homeowners who otherwise were wanting to sell.
As we head further into 2021, these conditions persist, even as normalcy and balance slowly return to the market. Perhaps the most surprising and underappreciated aspect of the past year is that seasonality was no longer a significant factor when buying a home. It also showed that no matter the season, people are willing to buy given the right conditions and personal needs. All they need are sellers willing to list.
Let's explore the misconceptions about real estate seasonality and debunk the myth of the right time to sell your home.
Historically, winter is the slowest time of year for real estate transactions. Stretching back into November and the end of fall, the time period between mid-November and mid-March sees a dramatic drop in homes listed and buyers on the market.
The primary reason, for much of the country, is the weather. In and around Newport Beach, that's less of a concern. While it is seasonably cooler, the area doesn't experience the blinding blizzards and sub-freezing temperatures elsewhere. However, as winter constitutes the region's rainy season, that may deter some buyers, but not all of them.
The second biggest deterrent is the holidays. Casual homebuyers or those simply taking the market's temperature aren't going to venture out when there are parties to attend, ski trips to take, and presents to open.
So what does all of this mean for winter real estate? It's a time for serious buyers and less competition. When you list your home in winter, expect to entertain only the most serious inquiries, meaning those who bring all-cash offers or fully pre-approved financing to the negotiation.
In addition, there's a contingent of buyers who use the holidays as a reason to start fresh and get into a new home by Christmas or the New Year. Often these buyers are highly motivated and willing to pay a premium for the right house in the right neighborhood, as long as it meets the move-in timeline.
With fewer sellers listing for the same reason fewer buyers are looking, your listed property will garner far more interest than during a more saturated time of year. Toss in the fact that lenders are typically less busy around the end and beginning of the year. If you're a motivated seller, that's a plus and only adds to the fact that winter is an underrated time to list.
When industry experts speak to the right time to list a home for sale, it's spring they are referring to, and let's face it, if there is "right" time from a purely seasonal standpoint, spring is at the top of the list.
Temperatures are comfortable. The days are getting longer. Landscaping reemerges from its winter hiatus, and there is a push to get outside and freshen up a property. With all of these factors combined, homes generally show far better.
It's also easier to prep and clean and repair your home during the springtime. It's a good thing, too, since the months between April and June are when buyers flood the market looking for homes. Although peak moving season occurs between June and August, effectively summer, those relocations begin planning and shopping for homes in April and May. From a listing standpoint, spring always makes sense. There are more buyers and more competition for homes between them. Demand will always be highest during the spring and most often peaks in May and into early June.
Additionally, if your home is in a submarket close to sought-after public schools or near a major employment center, it could prove even more lucrative in spring. Consider our same scenario from earlier; if yours is a desirable home in a sought-after neighborhood, spring will bring multiple competing offers. While winter may bring two or three serious, highly motivated buyers, spring may see you entertaining seven, ten, or even more interested parties. The only drawback is that you'll have to sort through a number of unqualified buyers as well, a situation less likely to occur from December through March.
One final note on spring listings is that inventory is also higher. Beyond the basic competition for the attention of buyers, correctly pricing your home is critical. With so many available homes, buyers are tuned into what's being offered at every price point. While winter brings less market pressure, spring forces you to pay close attention to comparables, past sales, and current listings.
Similar to winter, the summer listing season operates on extremes. Thankfully, Newport Beach doesn't suffer the same scorching temperatures as other parts of the country from June through September. As a result, summer along coastal California is a popular time for those looking to relocate from out of state to visit the market. Summer's longer days also provide more time for buyers to tour and more opportunities for your home to impress. Plus, your curb appeal is still in bloom and makes for a lush and memorable first impression.
However, summer, and especially late summer, can present you with uncertain pricing scenarios. Thanks to spring purchases, there's dwindling inventory and more comps and data to structure your list price around. While you'll better pinpoint the prices that buyers would be willing to pay, you'll also face competition from homes that lingered on the market. For those listings that are desperate to sell, bargain prices and attractive concessions could end up a factor.
It's not the worst position for your home, as buyers are typically suspect of homes that sit too long unsold, but it proves an issue in tight submarkets. Late summer offers a potentially lucrative window as there's always a late-arriving contingent of buyers looking to get settled into a home before a new school year starts. The upside here is the motivated buyer willing to pay a premium for a standout property.
If there were a shoulder season in residential real estate, fall would be it. There is activity, just not a lot of it. As in winter, you'll mainly entertain offers from serious buyers, but this time, the buyers seek out deals. Your competition will have a dramatically different look versus the other three seasons.
The good news is there will be considerably less inventory than the previous six months. The bad news is that inventory will, for the most part, be happy to oblige those wanting discounts. Inventory in fall is primarily made up of homes that didn't sell in spring or summer. While the owners may not necessarily be in desperation mode, they are far more willing to deal than at any other time of year. If you list in fall, expect below market pricing and concession to be the norm across most submarkets.
That said, if yours is an excellent home in a great neighborhood, your listing will stand out. You will need to work a little harder to position your home's value to buyers, but a solid sale is doable if you must list in the fall.
Regardless of the time of year—winter, spring, summer, or fall—there is always a market for housing. Buyers are always looking for a place to live, and let's not forget that investors are always looking for a new property to expand their portfolio.
When to list must make sense for your needs and your specific timeline. Certainly, many potential home sellers missed out on a lucrative seller's market for fear of being caught in conditions there weren't conducive to buying, and that's perfectly okay. They made the best choice for their lifestyle needs.
When your lifestyle demands a change—for a job relocation, access to better schools, a need for more space, or a want to downsize—you can have confidence knowing that mythical right time to sell is indeed just that—a myth. When selling your current home, the only right time is when it best suits your lifestyle needs and when the time is right for you.
If the time is right for you and you are ready to explore the best of Newport Beach real estate, contact Robert White today to start your home buying or selling journey. From Crystal Cove real estate to Newport Coast or Pelican Hill homes for sale, allow Robert and his team's years of experience and expertise to be your guide to luxury real estate along the Southern California coast.