The months of April through July are considered the prime months for the real estate industry as they account for more than 40% of a year’s housing transactions. This is the time people think about whether to keep renting or to move out. The prime real estate season generally varies, but over the years, it has been starting at the end of March (early spring) and lasts through the summer and in some cases early fall. There are varied reasons why this period sees an uptick in sales activities, but generally, good weather is a big factor. It is easy for people to move when the weather is warm, enticing homebuyers to trek to an open house which is difficult in cold snowy weather.
In addition, many homeowners don’t want to sell their home during the cold months, or during the holidays. With Christmas, new years and all the stress that goes in planning for the festivities, accommodating real estate selling can be a hassle for many sellers. Remember, it is also during this time when most home repairs are done, which ties into home inspections. Inclement weather and a snow-packed roof make it harder for inspectors to give accurate reports to prospective buyers. All these are some reasons why early spring through summer makes a good time to buy a home.
But the norm over the years has been changing and homebuyers are seemingly getting an earlier start especially this year, perhaps driven by the low mortgage rates. A report by Realtor.com listing data from 2015 to 2019 shows the spring seasons now starts in January for many of the nation’s largest markets.
Back in 2015, the peak month for average views per listing on realtor.com was April, January lagged behind with a 16 percent. And while it lagged significantly, January saw a surge, ranking as the top month in 20 of the 00 largest metro areas including New York, Los Angeles, Chicago, Houston, Seattle, San Francisco, Atlanta, San Jose, California, and Denver.
The generation of buyers today has very sophisticated buying strategies, thanks to technology and it would only seem they are modifying their buying behavior even more. Today, buyers are navigating the housing market that has become more competitive due to the rising prices and the low inventory, which means, to get lucky, the search for a home has to begin early. The report by Realtor.com ties with finding from Mortgage Bankers Association which also shows that spring homebuying season officially began in January this year.
The mortgage application is considered the first step in the homebuying process, therefore, this means that the applications made in January are a positive indication that buyers are ready and willing to buy early. The mortgage application continued to rise into February.
“The mortgage market continues to be active in early 2020, as applications increased for the third straight week,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Rates also rose, but still remained close to their lowest levels since October 2016,”
The MBA report also shows that buyers aren’t just moving to buy the houses, they are also continuing to refinance at record rates. MBA data shows that the Refinance Index climbed 5% to its highest level since June 2013. Compared with a year earlier, it was a whopping 207% higher this year. The share of refinance mortgage activity has been increasing over the recent past to a record of 65.5% of all the mortgage applications.
As of November last year, the number of sales across the country was down 9.5 percent Y-O-Y. Additionally, the inventory of the entry-level home prices below $200,000 shrunk by an astonishing 16.5 percent Y-O-Y.
You may wonder, since January has become the newfound favorite month for buyers, do spring months now become irrelevant or less competitive? On the contrary, that is very far from the truth. Data from MBA and Realtor.com just suggest that competition now starts in January and stays high all through the spring months.
Also, note that homebuying is not set on a stone. It is a general window and will change accordingly depending on the place and circumstances. For instance, places like San Francisco where the inventory is practically low, experience in home buying season is year-round. By the way, if you are looking to buy a home in the San Francisco and Bay region or any other place in California, reach one of our VIP agents stationed near you. Check agents in your area here; https://thepowerisnow.com/vipagentsservices/. At the moment, the environment in the U.S. real estate market seems to favor sellers, but buyers have the greatest leverage and sellers should not get greedy with their list prices. Remember, buyers today are savvy than in the past and they understand the risk involved in buying a home.
Sources and Works Cited