Ask an assembled group of property owners when is the best time of year to buy or sell property. You are likely to get the answer that summer is the best time. However for whilst toy manufacturers and retailers know that over 50% of their business occurs in the last 2 months of the year, real estate agents are actually pretty busy selling property year round.
The fact is that property sales are actually less susceptible to seasonality than some may think. In the chart below the calendar year is laid out showing the peaks and troughs of sales – this data is showing seasonality; based on over 15 years of data from the Real Estate Institute.
The analysis has shown that month-on-month variation in property sales tends to fluctuate by far less than people perceive. March is the most active month of the year, with January being the least active. Taking a typical year and a total sales of say 8,000 in March. This would equate to 258 sales per day; based on the same market the figure for January would be less, but still a respectable 190 sales per day. As for the winter months – they would average around 216 sales per day.
Having said that sales are not that seasonal it may come as some surprise to learn that there are some hidden “windows” of opportunity during the year to list a home for sale! In fact when selling a property, the best time could be in the middle of winter, a time traditionally thought of as the worst time of the year for the property market!
The chart below tracks the seasonality of listing volumes (new property coming onto the market) and also number of people viewing property online. These important new sets of data have only recently been available as a function of the dominance of the web in real estate researching.
The activity of researching and viewing property online (in red above) hardly varies by much through out the year (with the single exceptions of the ever-present distractions of Christmas and the fast approaching summer holidays). For reference website traffic is measured across a basket of leading real estate websites including Realestate.co.nz.
The one surprising fact though highlighted from the analysis is the seasonality of new listings coming onto the market (shown in blue above). In this regard the behaviour of sellers is completely out of line with buyer activity.
The majority of new property listings tend to flood onto the market in February & March and again in October & November. Such is the surge that close to 40% of all new listings in a year, pour onto the market in just these 4 months in the expectation that this is when buyers are most active. Equally in contrast, those winter months of June, July and August show the lowest level of new listings coming onto the market falling to barely 20% of the annual total of all new listings hitting the market during the 3 months of winter.
So what does this analysis tell us as property owners and buyers, and what should you do to take advantage of this analysis?
Well thinking about it, there is an opportunity here for astute property sellers. For whilst the temptation is to list either in the spring or summer, grabbing the winter season could give your property greater exposure at a time when fewer listings are out in the market to compete with, and yet at the same time buyer interest does not decline to the same extent.
So maybe the best advice is be brave and be different, and just maybe that sale may come sooner than you think giving you the opportunity to be buying just as all the new spring season listings hit the market.
Hi Alistair, did this article stem from my question about the dates of the most hits and the dates of the least?
Steve
You are “on the ball”! – certainly it did provide a catalyst for more analysis.
How do you feel about this research ??
Here is the piece from TV3 Campbell Live outling this research and receiving the feedback from property sellers http://bit.ly/aC1Yqt
It is very uplifting for agents. In the winter standing in an empty unheated home it will be nice to know that you may not be freezing your butt off for nothing.
Is there a marked difference between the hits in winter between the South and North Islands?
Very good question and one I have to admit I do not have the answer to.
Very interesting info. I have always found that we get better results for owners in the winter months simply because there is less competition on the market yet there is still a very large pool of buyers. But trying to convince owners to hit the market in July/August is not easy as they are mostly convinced that Spring/Summer is a better time.
I will use the charts contained in this post for future presentations so thanks for putting it together Alistair
Agree totally with Ross’ comments. Winter is when days on market seem to shorten, just like the days themselves.
That is almost poetic Steve!
Ross – you could even take the comments of the homeowners in the Campbell Live piece as enlightened sellers who could see the perspective of the research and potentially open to the idea of selling in the autumn or winter!
I was asked to appear on that Campbell Live story but unfortunately with several appraisals to do I couldn’t make it. Here is the video link:
http://www.3news.co.nz/Buy-or-sell-Exclusive-tips-on-the-property-market-/tabid/367/articleID/144197/Default.aspx
With the market currently swamped with listings as evidenced here http://tinyurl.com/yav83bd it would be interesting to know how people make up a shortlist of open homes to visit. Do they first consider homes with asking prices, only look at Auctions or some other method of selection. How do they find the open homes – in the newspaper, Property Press or online?
There appears to be an impression that open homes are the only way to view a property but rushing around 15 or 20 open homes between 12 noon and 3pm is not going to leave a good/lasting impression of any of the properties viewed.
Buyers seem reluctant to make actual appointments to look at homes or maybe they do not consider that they are available for viewing every day. By appointment inspections allow much more time to take a thorough look and make a more considered decision.
The strange thing at the moment is that only very low numbers are visiting the open homes so I wonder is this because the buyers are spreading themselves across so many homes in various suburbs and can only get through a certain number in one afternoon or have buyers simply gone to ground and will wait for prices to drop?
We have tried a couple of 11.15am-11.45am open homes and these have had more people through than the ones held after 12 noon.
Would be interested to get some feedback from prospective buyers and salespeople.
[...] the real estate industry and Bullet PR client, Realestate.co.nz, yesterday released research that debunks the theory that summer and spring are the best times to list your property. It reveals that sales are actually less susceptible to the seasons than some may think. [...]
Personally over the years, the most profitable months for my sales business have been December and March. I think it has more to do with “end of year” timing – calendar and financial and agent focus (reaching targets). Note too that sales made in these months are the result of property listed and marketed a month earlier. Clearly there is no season for selling, it’s more about a client’s needs dictating when the sale process begins.
Neil
I find your comment ““end of year” timing – calendar and financial and agent focus (reaching targets)” really interesting.
If you were someone visiting from Mars reading this you could make a deduction that with the incentive of reaching targets salespeople within real estate were in some ways working harder to sell property in this end of year period to make that target!
I cannot see this being the case given the incentive of commission is there year round or do you believe that with some commission structures based on total year sales there actually is a higher focus to sell at this time of year???
top achieving sales people are target drive. One more, (and another one more) before the close off period can push the results up. Personally, 0ver the years it has for me.
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hi i have a rural property in Matangi Hamilton. We have come to Ch Ch have been here 4 months as hubby is an assessor with Arrow International and this is where the work is long term. he is a builder and there is no work in Hamilton so our choice is ch ch. We want to buy here as they say his contract can go for 2 years up to 5 or longer we need to sell our 5 acre lifesyle block up there to free us to buy in Ch Ch.The bank has offered a loan up to 400,000 but we dont want to end up with 2 loans. should we wait for winter or put it on the market now.