The graph below is a five-year average of month-end data on number of new listings and number of closed sales, normalized to 100% at the June 30 midpoint of the year. Keep in mind that sale closing dates tend to lag offer and contract dates by 4 to 6 weeks, so when you see a big jump in closed sales, that was the result of Buyers selecting houses and signing contracts at least a month before.
The first and most obvious thing about the data is that from mid-year, the rate of new listings coming on the market falls off by over 60%, accelerating in the holiday months of November and December. Then the rate of new listings rebounds sharply in January, and then jumps again in March. This two-step jump in the rate of new listings after the first of the year is consistent across all five years of data, it is not a statistical anomaly.
The second major insight is that the rate of sales does not drop as much through the holidays as the rate of new listings, and then it accelerates again right away in March.
So what does this mean for potential Buyers and Sellers?
If you are a Seller wondering whether or not it is OK to put your home on the market during the holidays, the answer is yes. If you get it on the market by early November, you will have a period where there are fewer and fewer new listings coming on the market to compete with you, and proportionately a better number of active buyers to come look at it. And if you are waiting until after New Years to put your house on the market, you probably want to get it on at least by the first of February, well before the March rush.
If you are a Buyer, you should see a good flow of listings coming on the market in January, but by February the competition with other Buyers will be heating up, as seen in the jump in closed sales by March. Then the Spring buying season for families gets rolling, and doesn’t start slowing down until September. If you are looking to buy, your best bet is to get out and start looking early in January, so that you get a good look at that first wave of listings (some of which will be re-lists from the Fall). If you don’t find what you want then, you will be fully ready when the second wave of new listings comes on in March – you will know what you are looking for and the trade-offs you are willing to make. You’ll be ready to make a decision when the right house comes up – and not lose it to someone else who was better prepared.
You may ask why I didn’t include the 2008/2009 season – the answer is that the financial crash distorted the normal pattern so much last winter that I didn’t want to use that data. And our pattern this year is being distorted by the tax rebates for buyers - we won’t really know how this year’s pattern looks until next Spring. We are blessed to live in interesting times 