Winter Market or Spring?

It should be no secret that the busiest season in Red Deer real estate is April, May and June.  The answer to the question then would be the second quarter of any given year, or is that merely the popular time and not necessarily the best time to move? 2011 closely resembles a typical Red Deer real estate sales trend: What makes the best time to move the best time?  A number of factors influence such as:

  • Weather
  • Selection of homes to choose from
  • Economy
  • Work schedule
  • School schedule
  • Vacation plans
  • Interest rates
  • House Prices and Housing Costs rising
  • Political uncertainty
Let's break it down.
  • Weather:
It sucks to be trudging through the snow when it's -40ºC carrying boxes and furniture into your new home.  So it certainly makes sense that we'd want to move when it is warmer and dryer.  However if you're hiring a mover and concerned about availability of a professional mover/moving company then the colder months just maybe better.  The seasonal volume dictates that movers are busier in April, May and June and the availability of movers becomes more challenging to secure.  Colder months just may be better if you're hiring a mover.  Not to mention the easier availability of the do it your self moving options and possible price breaks.
Do you like mowing the lawn and the other landscaping that comes in the spring, summer and fall?  Selling during those times of the year may by stressful for you.  The pressure of having to mow the lawn, rake leaves, pull weeds, plant flowers and trim the hedges.  During the winter yard care is much simpler.  It consists of shovelling the driveway and sidewalk.  Other than that a fresh clean blanket of snow makes the yard look pretty darn good.
  • Supply of homes to choose from:
The spring brings for sale signs faster than dandelions some years, so there are certainly more homes to choose from.  Conversely their are more sellers competing to sell, which is bad if you are selling.  Increased competition in the sales department makes it harder for your home to stand out and puts increased pressure on price.  Colder months historically have lower listing volume, so as a seller you could benefit from a stronger price market.  Sellers are also more serious in winter months as the warm market months bring out some sellers that will only sell if they get their price.
  • Selection of homes:
More to choose from in warmer months historically.  It's like going to the mall.  More variety to choose from, so buyer can take their time and chop around.  However the historical trend also bring out more buyers so the likelihood you could be competing for a house goes up, as do prices.  Builders tend to set their prices in the new year and that is really evident when the volume increase in the spring.  The decrease in supply deters buyers that are more casual in their intent, but those buyers in the colder months tend to be more serious.  They may be more apt to buy because the "have to" versus "want to" however the same can be said for sellers.
  •  Economy:

Economy may not seem seasonal but in a resource rich economy and country like Alberta Canada there certainly is a busy season and a busier season.  The most notable slow down in Alberta seems to revolve around "spring break up".  That time of year when the ground is in unthaw mode and its to soft to travel into pastures, and back country as well as gravel roads.  This oil field slow down actually tends to be when both heads of the house are around for longer periods of time and able to make the decision fuelling many of the purchases and decions that mark the Spring market.

  • Work Schedule:

Besides echoing the content above in the economy section, work schedules get longer in warm months with many industries working later and more often while the sun shines and the weather is great.  There tends to be more down time in the winter in industries other than oil & gas to make decisions.  Based on "down time" colder months may be more suited to making buying decision that are not rushed.  **Caveat** unless you're a hardcore hockey player/fan. :-)

  • School Schedule:

Typically parents will tell us they don't want to move the kids during the school year, and/or they want to be settled before school starts.  However the largest volume of closed transactions happen April, May and June.  A "closed" real estate deal for us marks when the title is transferred and keys turned over for a move in.  So more people move in the spring and early summer.  That is during the school year, and in the middle of finals and graduation for many families.  Typically a busy time of the school year.  Cold months may in fact afford more free time than the spring months while the ideal months to move with school kids might very well be July and August.  The question may be is January less distracting time to move on your students?

  • Vacation Plans:

July and August are busy months in real estate especially compared to January.  IS it because we're all going away in January or in the winter?  Not really summer tends to be more the vacation getaway months yet those months are consistently busier than October - February.  I don't think vacation plans prevent sales it might speed the process up as the departure date approaches and stall things but if you're planning on moving I don't think that is a hurdle in most peoples processes.

  • House Prices and Housing Costs Rising:

Seasonally speaking housing costs rise in the winter with your gas/heat bill.  That should provide more motivation to secure a more efficient home to heat and operate.  House prices rise in the spring and new year.  Historically this seems to be the case as the volume of sales in April etc... set the pace or tome of the rest of the year and the reasonable price expectation of the market.  It also marks when home builders are busier with increased orders for new homes.  The increased activity also results in an annual price increase set by the builder and developer.  the increased demand for construction supplies also increases the building costs.  If people are not buying as much construction materials then we should see suppliers looking to move product and offer incentives for their saes to pick upo in the colder months.

  • Political Uncertainty:

I don't think this is that big of a deal in Canada.  Given elections here don't fall on any set scheduled date.  We certainly semed to have gone to the election polls regularly over the last 5 years.  Hoever each change or potential change does slow things down as we wait and see how things may change.  If you think that political change can't "really" impact real estate and the economy here in Alberta then you need to talk to some one who lived and worked here in the 70's during the "national energy program".  That had a huge impact on Alberta real estate and teh economy.  Most recently their was a change in the Oil & Gas royalty program in Alberta which slowed growth in that indutry and changed market bench marks which impacted employment as well as income.  Global economy is still changing and the US economy has certainly hurt us since 2008 in many respects.  Is the worse over there and will that impact us?  That might be more reason to sell now, and buy now with a locked in fixed rate.  We know interest rate and financial market conditoin now.  A downturn may last a year or two, but of you lock in now you have secured your housing costs at low interest rates for the next 3- 5 years.  Not a bad idea. It seems to me that now or during the colder months may be the better time to buy or sell real estate.  So why is it that isn't reflected in annual real estate volume? What do you think?

Patrick

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