Timing the Sale of Your House
Real estate marketing activity isn’t flat throughout the year. In most communities, choosing the date you put your house on the market is an important decision. Certain periods of each year are predictably advantageous for sellers. Others are just as predictably less than stellar.
No matter where you live in the United States, the real estate marketing calendar generally has two distinct peaks and valleys created by ebbs and flows of activity in your local real estate market.
The sales peaks are higher and longer in good years, and the valleys are deeper and longer in bad years, but the marketing calendar’s relentless rhythm never changes. These seasonal cycles are heartless. They don’t care about birth, death, divorce, job loss, or any other life changes that force you to sell. You can’t alter the rise and fall of market cycles any more than you can stop the tides. You can, however, use the predictability of these cycles to your advantage. This section helps you identify when the best times are to put your house on the market and which are the worst.
First peak season: Spring flowers and For Sale signs bloom
Calendar years begin January 1, but real estate years don’t. Depending where you live, the longer and stronger of two annual peak seasons begins somewhere between late January and early March. If you live in a temperate area, such as Florida or California, the market kicks into gear sooner. If you’re still digging out from under ten feet of snow on March 1, your market may take longer to heat up.
Weather aside, most folks don’t bound out of bed on New Year’s Day to buy a house. They need several weeks to adjust to the daily grind after that happy whirl of holiday parties and vacations. The buy-now, pay-later monster also rears its ugly head; people need time to recover from the trauma of paying all their holiday bills. As a result, many January buyers are extremely price conscious.
February through May normally is the most active selling time for residential real estate. Families with children want to get their purchase or sale out of the way by late spring so moving (which typically occurs 30 to 60 days after the ink dries on the contract of sale) won’t disrupt the kids’ schooling for the next academic year. Other people buy or sell early in the year for tax purposes or to avoid interference with their summer vacations. The annual outpouring of new listings pulls buyers out of the woodwork. Sellers are drawn into the market by all the buying activity.
The first peak season is usually the best time to put your house on the market. High sale prices result from spirited buyer competition. Because more buyers are in the market now than at any other time of the year, your best chance of getting a fast, top-dollar sale is during the first season. If you intend to buy another home after yours is sold, this time period offers the best selection of homes to purchase.
First valley: Summer doldrums
Memorial Day generally marks the beginning of the first valley. Sales activity usually slows during June, July, and August. People who bought or sold in the spring move in the summer. Buyers, sellers, and agents often take summer vacations, which reduces market activity. Many folks spend their weekends having fun in the sun instead of looking at houses. Who wants to be cooped up inside on a sumptuous summer day?
Houses ordinarily take somewhat longer to sell in the summer because of a lower level of buyer activity. Unless you have to sell now (or if property values are declining), wait until the fall to put your house on the market. You’re likely to get a higher price after people return from vacation.
If you’re selling your house to buy another one, keep in mind that summer is your first opportunity to go bargain shopping. Summer is a good time to find motivated sellers who bought a new home and must sell their old one fast before the ownership expenses of two properties put them in the poorhouse. Less property is available to choose from in the summer than in the spring, but plenty is still on the market.
Second peak season: Autumn leaves and houses of every color
Labor Day usually starts the second peak season. This peak normally rolls through September and October, and into November. Don’t let the beautiful autumn leaves fool you, however. Just as fall brings a chill to the air, an icy edge of desperation develops in the second season for some sellers.
People who sell during late autumn tend to be strongly motivated. Some bought new homes in the spring before selling their old ones. Now they’re slashing their asking prices — finally getting realistic after wasting months marketing overpriced properties.
Others are calendar-year taxpayers who sold houses earlier in the year and want to buy their new home before December 31. Why? So they can pay tax-deductible expenses (such as the loan origination fee, mortgage interest, and property taxes) prior to the end of the year to reduce the impact of federal and state income tax. Either way, calendar-year taxpayers are under pressure to buy.
If you’re a bit of a gambler, the second peak season may be the most rewarding time to sell. Your house should sell quickly and profitably. Unless prices are rapidly increasing in your area, wait until activity slows in mid-November and then buy your next home at a discount price. You get the best of both worlds — “sell high and buy low.”
Deciding to sell during the second peak season can be a risky gambit. If you inadvertently overprice your house, it won’t sell. If you need to sell, carefully monitor buyer response to your property. Be prepared to drop your asking price as soon as you identify the danger signs. Don’t wait until Thanksgiving to reduce your price. You may end up attempting to sell your house during the dreaded dead season.
Another problem with waiting until the second valley in the real estate marketing calendar to sell your house and buy your next home is that you’ll probably have a very small selection of houses to choose from. What good is a fantastically low price on a house you hate?
Death Valley: Real estate activity hibernates until spring
The second peak season usually drops dead a week or two before Thanksgiving. With the exception of a few, mostly desperate, sellers and bargain-hunting or relocating buyers who stay in the market until the bitter end of December, residential real estate sales activity ordinarily slows significantly by mid-November. Folks stop buying property and start buying gifts. Would-be sellers take their houses off the market while their kids are out of school and their guests are visiting for the holidays. Ski slopes and sunny beaches beckon.
This real estate Death Valley is generally the worst time of year to sell a house. Even the brilliant pricing techniques in this book may not be able to save you from getting your financial bones picked clean by bargain-hunting vultures if you’re forced to sell at this time of the year. The weather is miserable, and very few buyers are in the market. Time will show you no mercy if you wait until this point to get realistic about pricing your house to sell. Don’t put your house on the market during Death Valley days unless you have absolutely no other alternative.