For every market, there’s always a season that favors buyers more than sellers and vice versa.
Being able to accurately time the markets over time is what earns the real rewards.
When it comes to real estate, market timing tends to be more predictable than the equity markets due to overall less volatility, more lag, negotiation, and deal processing made.
Unlike buying 100 shares of your favorite tech stock, you cannot close on a property in a matter of seconds.
Hence, this is why real estate is one of my favorite asset classes since it is more predictable and you know your home’s value won’t be cut in half overnight due to disappointing earnings results!
That’s the price you pay with risk assets since more risk = more reward after all!
However, as a real estate owner, and investor of crowdfunding opportunities, physical tangible properties, and eReits, I’ve discovered real estate is one of the few asset classes that actually offers less risk and more return over time, especially in terms of multiple passive income sources, namely through rising rents and capital appreciation.
The Best Time Of The Year to Sell and Secure a Deal For Both Sides
As a seller, the most opportune time to get your property off the market without sacrificing the ultimate buyer in paying top-dollar is during the spring and summer months. This is due to several reasons, many of which have nothing to do with the 101s on housing itself!
When potential buyers tend to have more time on their hands, such as during the dog days of summer leading into the school year, they are oftentimes more eager to move in and get settled in before the fall ramps up.
With sellers, they’re in the same boat. They are looking to close out the deal with a moderate timeline, but not as ferocious as during the winter since they know families alike are looking to do the same. During the spring and summer months it is naturally easier for sellers since there is more demand, more speculation (more buyers and more sellers), higher inventory, more froth, and possible bidding wars with more of a catchup period set by buyers. Buyers themselves will have a bit more difficulty finding a bargain-basement deal they can call their forever home at this time and may have to scoop out more from their pockets than intended.
The spring and summer months are also naturally more advantageous for sellers due to the climate in most of the U.S. which lend itself to more open-house opportunities and showings. When people are in a good mood when it doesn’t get dark out at 4 pm and it isn’t freezing, they’re also in a spending mood!
Hello, revenge spending spree of 2022! Since Americans were locked down for a year and a half during the pandemic, the Fed is now grappling with all this pent-up demand and monetary stimulus so much so all this good news might wreak havoc on the economy.
The good news is unfortunately bad news as well!
Luckily even when the economy is playing out as a paradox, real estate still prevails with rents up more than 5% in the coastal, sunbelt, and heartland states.
While on the flip side, the fall or winter months will require sellers to have more patience but for buyers, especially in this current environment where 30 yr mortgage rates are past 7%, inventory has cooled substantially.
Plus to a seller who is more eager to get rid of their property before the dark gloomy days of winter roll around, a buyer is seen as more attractive to be hunting when no one else is.
We cannot expect the American Dream to be as inexpensive and affordable as before, especially when it comes to buying one’s dream home to live in for decades to come. In that case, looking for a deal during the winter and fall months when most buyers believe they’ve already missed the best window to buy a home with more sellers’ listing their properties, might in fact be the best time for both parties!
After all, if you’re willing to do what no one else is, you’ll always find a golden goose opportunity somewhere.
Plus, if you’re a buyer with an all-cash offer, that deal can be closed in no time since you’re seen as the most attractive buyer.
When you get both parties to win, the deal is extra sweet.
What Sellers Must Keep in Mind During the Dark Days of Winter
Sellers who put up their property during the winter or holiday months, also known as “the best time of the year”, must stomach the extra risk. With difficult weather conditions, fewer open houses scheduled, and naturally less demand towards the end and beginning of the new year, rushed sellers have to be willing to price their property at more reasonable not frothy levels otherwise they will have to face the consequences of paying higher marketing fees to the brokerage and keep their property listed for longer with no potential buyers in sight. If you are unwilling to negotiate, you will make your life more difficult and lose out.
During the spring and summer months, sellers can get away with listing their property oftentimes for higher than what comps screen, especially if there’s a lot of demand in the area at a certain time frame for example in a town where the only major attraction is the school and majority of residents move in around spring time secure their spot in the fall. Worst comes to worst, the family will take any house, possibly at a higher price to put their child in the best school they can afford and find.
Education is an economic premium that cannot be replaced. Parents will do anything for it which makes housing markets with prime school districts very appealing. Focusing on location and the seasonal time period of where the property is located is crucial in order to unpack the trends and make better predictions on how the housing market will be forecasted in the future.
Winter is by far favorite time of the year to salvage real estate deals. It may be chilly outside but inside can be cozy after buying a fixer-upper. It’s the potential that’s evaluated.
Plus an advantage to selling & buying during the winter months is that you can finally enjoy your property during the more weather-friendly months after your months long renovation from Jan-April. It always takes longer than intended. Block out at least three more months for anything that is estimated to take only one!
Sellers listing during the holidays and difficult weather conditions is likely more motivated than those listing during the spring and summer. Thus, if you can get a rushed seller to sell for 10–20% below Jan-May 2022 comps, you are getting your money’s worth.
Pricing a bit lower than what other properties are asking for is more advantageous NOW if you’re looking to sell ASAP. For the seller, it might be more opportune anyways than waiting longer to sell it only for a bit higher when considering the invisible wasted time and paper fees.
At the end of the day, it all comes down to your priorities. If you’re looking to get rid of the property, not let it linger and have to cut it in price every few weeks, set a reasonable target now rather than later.
It’s all in your hands.