For those who have lived in a place with humid summers and snowy winters, the real estate market likely started in spring when yards began to bloom. But here in the Bay Area — where there’s always something blooming, and winter lawns are greener than summer ones — is there “seasonality” to the real estate market? There is, and it may be different from what you expect. It could even be most visible in the next few months.
Real estate can be looked at from two perspectives: from the supply side (sellers) and the demand side (buyers). Each has its own patterns, which usually move in tandem. But when they don’t, opportunities can arise.
For instance, as you can see in the charts below, the number of new listings spike during the spring (April-June) and fall (September-October). It’s during these seasons that the majority of buyers and sellers are ready to deal with real estate transactions.
During summer vacations and the winter holidays, many people don’t want to be interrupted with real estate negotiations. And bad winter weather puts a damper on open houses. During all these times, supply and demand are typically in balance.
But there are at least two points of the year when that balance shifts, offering opportunities on both sides of the transaction. This does not mean that sellers or buyers should not move forward during other times of the year — each property and neighborhood is unique, and the right opportunity can crop up at any time.
February-March can be great for sellers
In February and March, buyers are quite active: They’re no longer distracted by holiday festivities, they’re spending time inside and away from the rain, and they’re thinking about their real estate goals for the rest of the year. In short, they’re looking for homes. However, the supply of new listings is low at this time. That’s because it takes time for sellers to come to market, from signing a listing agreement to painting a house while it’s not raining.
During these months, supply is low and buyer competition for that limited inventory is at its peak. You can see this in the data, including the percent difference between the list price and the sale price and the number of days on the market.
Summer & holidays can be great for buyers
As mentioned above, the number of listings is low during the summer months and the holidays, and fewer buyers are focused on the market at those times. This creates an opportunity for buyers who remain engaged during these times — as they have fewer buyers to compete with, and sellers may be more likely to negotiate.
You can see these trends in action using the charts below. They display sold data by the month the property listed, not when it sold. Click the arrows to the left and right to view each chart.
If 2024 unfolds the way we expect, which includes a decrease in mortgage rates, these same trends will likely be in effect this year. Competition levels may even be higher, driven by pent-up demand.
Timing the market can be challenging on both sides of the transaction, and it should not be the only guidepost for deciding when to buy and sell. The information above is most useful to sellers and buyers who have some flexibility and time to plan in advance.
Each buyer, seller, and property is unique. One never knows when just the right home will come on the market for just the right buyer. People should make decisions that are right for them.
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