Has the spring market already bloomed?
When we speak of real estate trends and values that come and go throughout the year, we often associate the Spring Market as the peak market. Typically, the so-called “Spring Market” is a specific period when we see the most activity in the overall annual sales, volumes, and a higher average sale price. Indeed, Spring is when we typically experience greater activity in the market with March marking the beginning of the so-called Spring market, and the beginning of the trend, with continued momentum that would peter out at the end of May or mid June.
This blooming period for the market makes sense for multuple reasons. Weather is a factor, and so is timing of closings that would correlate with the end of the school year, in late June. I recall being advised by lawyers and some more experienced agents, not to close transactions at the end of June, especially if it was a Friday, as the last Friday of June was typically the busiest closing day of the year, making the possibility for things to go wrong much more likely.
Another factor contributing to this perceived “boom” in the Spring Market involves the contrast or shift in motivation to buy/sell during the beginning versus the end of winter months. Typically there is a sense that the real estate market will slowly start to gain momentum after the Holiday season, as agents and sales slowly awaken from the seasonal hibernation period which started in early December. Many sellers and buyers opt to postpone selling or searching activities during the early winter months, to avoid the inconvenience and disruption, making the Holiday season and the months of December and January, predictably slow and consequently reflective of the lowest sales activity in the year. Low supply numbers and equally low demand. This trend also sat well with the industry traders, as it provided a pause, in what is normally a hectic pace.
Do these typical trends still hold true today? Well, in the last few years, the Spring Market sales activity have accelerated with essentially no pause over the Holidays. While supply still falls off in December, we are not seeing a slow down on the demand side. If you are away or disengaged from the real estate market in the first two weeks of January, you will be caught off guard by the amount of activity and buzz that the real estate market is generating so early in the year. One will also see a noticeable bump in the average sales price, in early January.
So, with the first day of Spring actually being on March 20th, is the term “Spring market” a misnomer?
If we look at February 2022 sales numbers of just under 9100 hundred units sold, we see the trend of an early spring market will likely continue this year. March of 2021, was the busiest Month of the year, with sales trending downwards from there on. By comparison, the units sold in 2001 started to trend upward in March and peaked in May, as expected in a normal Spring Market.
So, what is causing the “Spring Market” to peak in late Winter? There might be multiple contributing factors to this dynamic. One, the Holiday season doesn't quite come to a stop as it did two decades ago. The 9 to 5 is now more like 24/7, and then there is the most likely cause and greatest attribute to this new trend…Millennials! No time to waste - just get’r done. Get me that house and get us out of town! Tick tock, time is awasting.
To that end, when I am asked what the best time of the year to sell is, my response has consistently been February 1. Definitely not spring.
-Credits to Manny Andrade, Broker of record/president of Royal LePage Supreme Realty