The spring season is traditionally a time when both home buying and selling activities are in full swing. As we approach this time of year, it is important to note that the available housing supply is already rebounding. Recent data from Redfin, a real estate site, shows that the number of new listings has increased by 14.8% compared to the previous year. This marks the largest annual gain since May 2021. Buyers are eager to find a new home before the start of their children’s new school year, while sellers benefit from the beauty of fresh flowers and renewed greenery post-winter.
A common belief is that the ideal time for both buyers and sellers is during the spring season. However, recent analysis suggests that sellers may benefit from waiting until June to put their property on the market. Homes listed in the first two weeks of June have historically sold for 2.3% more compared to other times of the year, which translates to a $7,700 increase on a typical U.S. home. Real estate cycles have shown that there is a noticeable shift in behavior, with trends becoming less predictable due to changes in market conditions over the past few years.
The Covid-19 pandemic in 2020 disrupted the traditional spring home shopping season, leading to a shift in the market that has persisted in subsequent years. While buyers were active throughout 2021, regardless of the month or season, the dynamics changed as mortgage rates began to rise in March 2022. Despite some experts predicting a return to normalcy, the notion of a traditional spring selling season may no longer hold true. Homebuyers and sellers now appear to have a more year-round approach to real estate, with the potential for an extended home shopping season in the summer.
Looking ahead, experts anticipate a second surge in the real estate market during the summer months. The Federal Reserve is expected to begin cutting rates, which could further ignite buyer demand. As mortgage rates decrease, buyer interest is likely to rise, potentially leading to increased competition and higher home prices. While the median U.S. home sale price continues to be elevated, supply remains insufficient to meet the existing demand in the market. For those considering purchasing a property, the current market conditions may offer an opportunity to buy now and refinance later.
The spring real estate market is poised for continued activity, albeit with some uncertainties and shifts in traditional trends. As buyers and sellers navigate the evolving landscape, careful consideration of timing and market conditions will be crucial in making informed decisions. By staying informed and adapting to changing circumstances, both buyers and sellers can position themselves for success in the dynamic real estate market.
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