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Is the Housing Market Bullish?

The housing market is not very different from the stock market and it also has its ups and downs. However, many people believe there is a predictable annual seasonal cycle in the housing sector, and they are not off the mark. In the coming months, as the cold weather turns warmer and the spring flowers make their first appearance, you can expect to see a “bullish” housing market characterized by a hopeful and buoyant buyer base. There is a biting lack of inventory in the market at present, leading to the slowness in the market. If you subscribe to the view that there is a discernible seasonal variation in the housing market, then you can expect to see more activity in the spring. Buyer demand is traditionally at its lowest in the winter months. This is especially true of regions that endure a severe winter season with sub-zero temperatures, simply because it’s no fun going to (or hosting) an open house in arctic conditions.

The upswing in both prices and the number of transactions during the warmer spring and summer months is observed in a repeated manner year after year in many different countries around the world. In fact, the National Association of Realtors lists the spring-summer months of April, May, and June as the top dates when the maximum number of homes are listed for sale, providing buyers with the maximum choice and increasing the chances of a match.

Seasonal trends in the housing market are often masked by a more prominent longer-term bias such as high mortgage rates or nose-diving home prices. There are several factors that influence the market and several indicators that drive prices. Carefully sifting through the data can help to identify the dominating seasonal pattern, which can be extremely useful in assessing whether to sell or hold for a better offer. Seasonal patterns are essentially strong hints that should guide your buy, sell, list, search, or build decisions. It is also known that buyers experience an earlier “thaw” from the winter than sellers, i.e. buyer searches are the first to show signs of activity in March and April, with the number of sales and the prices peaking in May and June. Inventory can continue rising all through the summer until August, after which things tend to slow down again.

The demand for housing has remained strong this year with mortgage rates being some of the lowest ever recorded. If you are planning to list your home for sale, now is the time to stay one step ahead of other sellers. By putting your home on the market before the it becomes deluged with a swarm of spring-summer sellers, you can take advantage of presenting your property to eager buyers with far less competition than you will face just a couple of months down the line. The important thing to understand is that as winter winds down, the housing market is going to be bullish, as it is every year, with buyers being slightly ahead of sellers in terms of activity picking up. The savvy home seller, therefore, can steal a march on others by being one of the first to list the property.

Sources:

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