By Jamie Anderson on May. 4, 2017
Spring features the highest number of homes that are newly listed, making it the right time to buy for buyers most interested in finding the perfect home.
Spring is also the time of year when buyers will face the most competition, meaning homes sell faster and for a higher premium than at any other point in the year.
Buying towards the end of summer offers patient buyers both selection and bargains.
The start of the busy home shopping season in early spring is a time of optimism for would-be home buyers – more new listings come on the market in spring than any other time of year. Come late spring, however, that optimism may turn into desperation as fear of missing out on the season’s newly listed homes leads many to pay more for a home than they otherwise may have. But buyers seeking the best time to buy — looking to hit the market both when selection is good and deals are abundant — should remember that patience is a virtue and consider opening their home shopping window in late summer instead, according to a Zillow analysis of listing and price data from 2016. Certainly, if you’re a buyer interested only in finding the most homes listed for sale, spring is the time to shop and make an offer. More new listings hit the market nationwide in April of last year than in any other month, and in almost every large housing market last year, buyers were offered the most new selection in April, May or June. This springtime pattern is even more extreme in markets with harsher winters: In Chicago and Minneapolis, for example, almost twice as many homes are listed in May and June as in December and January. More temperate markets, like Miami and Tampa, have barely any noticeable seasonal pattern at all.
But while spring offers the most new selection, it is also the season in which buyers face the most competition – and competition drives up prices. A higher share of homes sold in the spring months sell for a premium than homes sold at any other point in the year.
One in four U.S. homes sell above initial list price in March through May, which is higher than at any other point in the year. This pattern is consistent market to market. In Seattle, over half of homes sold between March and May will sell above list price. By late summer this falls to one in three.
For would-be home buyers, this poses a dilemma. Should they purchase in the spring, when they have the greatest number of choices? Or should they sacrifice selection in favor of less competition in the latter half of the year? Lucky for them, our data shows that late summer offers a nice compromise between reasonable prices and selection.
Not every home listed for sale in spring will ultimately sell, and many of these not-so-spring-chicken listings can often be had for a discount. And the combination of new homes initially listed in summer and these leftover spring listings means there’s almost as much overall for-sale inventory at the end of summer as there is during spring. In fact, there were more active U.S. listings on Zillow in August of last year than in June, and September wasn’t too far off. This is true for most of the largest metros as well.
And the fierce competition that bites buyers in spring comes full circle and begins to squeeze sellers in the summer. Sellers, wary of the impending return of cold weather, school and all the other factors that annually signal the end of the spring/summer home shopping season, begin to worry about selling their home this season instead of having to re-list and try again next year. The competition with all those other lingering listings leads many sellers to slash prices in late summer and early fall in hopes of finally attracting a buyer. In almost every large market analyzed, the highest share of listings with at least one price reduction were in August and September of last year.
There’s little reason to believe the seasonal patterns observed in 2016 will be significantly different in 2017, meaning it’s highly likely good deals will exist in late summer for patient buyers.
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