The seasonal factor in the property market
The belief amongst the real estate community is that the traditional spring surge in activity has only momentarily been delayed this year on account of the election. The hope is that now we have the election behind us the market will kick into gear. In my opinion there is no statistical evidence to support the view that the election has caused any dampening of the property market, not this election at any rate, there was certainly evidence in past elections.
However, irrespective of the election's impact, the reality is that the market will see a flurry of activity in the next couple of months leading up to Christmas. The fact is Spring is the most active time of year for property listings. Analysing the data for the past 7 years shows that the Spring months of September / October / November sees over 10% more properties come onto the market than would be the case for the proportion of the year made up by a 3 month period. At the same time as listings rise 10% above normal sale only rise by 3% compared to normal.
This vital insight which is presented in the chart below highlights some interesting facts about buyer and seller behaviour over the key seasons of the year.
From a buyer perspective the best time of the year is Spring as the proportional level of new listings is much higher than the proportional increase in sales as there is generally a better selection of properties on the market and less competitive pressure.
For sellers the best season is the Winter when new listings are over 10% lower than normal but sales only decline by around 4%. Equally the Autumn period is relatively good as the rate of sales increase compared to normal is higher than the rate of listings increase. It is the most active time of the year for the industry.
The Summer period is challenging for both buyers and sellers, relative sales levels are well below what would be for a normal 3 month period but listings are quite closely aligned with a similar level of drop off.
It certainly pays to think before making the decision of when to sell and when to buy. Naturally the decision of when you want to move house is more often influenced by external factors which means you don't have a choice but if you do, then choose wisely.