Is the Real Estate Market currently seasonal?
If you have ever considered buying a new home, chances are you waited for the time of year when the sun was shining, roads were clear, and new homes were flooding the market. Spring time has always been an optimal time to buy a new home as sellers are preparing their homes for showings while the weather is nice. However, since the outbreak of COVID-19 the housing market has experienced a delay in purchase activity.
New buyers have waited for the economy to re-open as well as other signs signaling that it’s okay to start buying real estate again. This delay has created a fruitful fall season in which many realtors are now labeling the new spring.
Mortgage Rates Staying Low
Since April purchase mortgage applications through the beginning of July had increased for nine consecutive weeks. While purchase (and refinance) activity has been fueled by low mortgage rates, it can also be attributed to buyers delaying their purchases that would have traditionally been completed earlier in the year.
Exodus from NYC
Recent trends also show that buyers are making their way out of cities and other populated areas in favor of the suburbs. Fortune magazine recently found that 64% of Zillow homebuyers using searching for properties located in suburban areas. Unlike many urban dwellings, often suburban homes experience the full spectrum of seasons and also offer a quieter environment to raise kids or start a family.
This has become especially prevalent for Connecticut real estate as New Yorkers have increasingly been buying up homes in local neighborhoods.
According to the United States Postal Service, between March and June 2020 over 10,000 New Yorkers submitted address change requests to Connecticut, an increase of 1,200 compared to the same period the previous year.
The Fall Advantage
But that’s not all. In fact, buyers and sellers are both finding other advantages to buying or selling in the fall over the spring.
For example, spring has always been viewed as the perfect time to sell because it can give the best first impression of a home — flowers are blooming, the sun is shining allowing more light to filter in, and the grass is verdantly green. In short, spring time helps boost your home’s curb appeal. However, as buyers restart their property search in the fall season, sellers looking to stage their property have found equally effective techniques to boost curb appeal including haybales, pumpkins, and colorful (but well kept) fall foliage.
Another reason why buyers should leverage buying during the fall is that sellers are becoming increasingly fatigued with the selling process. While the low inventory is helping to suppress the days, a property is on the market before it receives an accepted offer, there are many sellers who started the sales process in the spring prior to the COVID-19 outbreak. Economic uncertainties may have scared away potential buyers or offers may have fallen through the cracks as buyers’ credit or employment rendered their ability to obtain mortgage financing mute. This means that there may be several outlying sellers who are motivated to sell but have not been able to.
While it may seem a bit untraditional to buy or sell during the fall season, fall 2020 seems to be gearing up for increased activity within the U.S. housing market.
Where to Start
If you’re considering selling your house, let’s connect to take advantage of the current housing market and trends. Start with information on The Selling Process and let’s connect.
Sources
1 Homeownership Rate for the United States. (2020, July 28). Retrieved September 16, 2020, from https://fred.stlouisfed.org/series/RHORUSQ156N
2 Campisi, N. (2020, September 11). The Fall Real Estate Market Is Abnormally Hot As Mortgage Rates Break Records. Retrieved September 17, 2020, from https://www.forbes.com/advisor/mortgages/fall-real-estate-market-mortgage-rates-break-records/
3 Roberts, J. J. (2020, July 17). Are people really fleeing cities because of COVID? Here’s what the data shows. Retrieved September 16, 2020, from https://fortune.com/2020/07/17/people-leaving-cities-coronavirus-data-population-millennials-marriage-families-housing-real-estate-suburbs/
4 Hogan, K., & Lank, O. (2020, July 14). New Yorkers moving to CT at an unprecedented rate during COVID-19. Retrieved September 17, 2020, from https://www.wfsb.com/news/new-yorkers-moving-to-ct-at-an-unprecedented-rate-during-covid-19/article_f36b8e10-c609-11ea-9861-4be85768ebb4.html