Seasonality in Real Estate: How Weather and the Time of Year Affect Housing
Weather and the time of year have a big impact housing activity, and in every housing market there are times of the year when fewer homes sell. For most, that time of year coincides with the winter months, and in much of the U.S., that’s the case right now.
But no matter where you live, it’s important to know how seasonality affects the housing market. So let’s look at the current housing numbers, how seasonality affects them, and what it means for you if you’re looking to buy or sell.
With few homes available, sellers are in pole position
Last year, limited inventory dominated the headlines for the real estate industry, and that trend looks to continue this year. According to the Southern Georgian Bay Association of Realtors (SGBAR), with only 195 new listings, inventory has dropped 26.4 percent from December to January, for the Western Region, including Wasaga Beach,Springwater, Clearview, Collingwood, The Blue Mountains, Meaford and Grey Highlands. Days on the market is low as well, sitting at 75 days currently. There were 5.6 months of inventory at the end of January, well below the 10.2 months recorded at the end of January 2015 and below the long-run average for this time of year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
Why is inventory so constrained? Part of the sharp drop in December is due to the seasonal slow down in many areas. Cold weather and holidays keep many buyers out of the market and many sellers waiting for demand to pick back up. . Existing home inventory is low as well. A combination of factors, such as locked-in low interest rates and a sense that home prices will continue to increase, are keeping current homeowners from listing their homes.
If you’re thinking of selling, this market is very much a seller’s market. When inventory is scarce, buyers are forced to compete over the few homes for sale. Homes are selling faster, and in many markets bidding wars drive home prices up well above asking. At the very least, you’ll be in a strong negotiating position.
Ontario Employment Trends
The unemployment rate in Ontario was 6.8 per cent at the end of January 2016, unchanged from the previous month.
Full-time jobs were up from the end of the previous month to a new monthly record.
There were 19,700 more full-time jobs in January 2016 compared to a month earlier. A loss of 4,900 part-time positions led to an increase of 14,800 total jobs in January.
Full-time job gains occurred mainly in agriculture, construction, trade services, transportation & warehousing, prof., sci. & tech. services, healthcare and accommodation & food services and public administration.
The Bank of Canada announced on January 20th, 2016 that it was keeping its trend-setting target overnight lending rate at 0.5 per cent.
The Bank cited divergence as a key theme in its most recent announcement. Globally, a steady and on track recovery in the U.S. coupled with higher economic growth in oil-importing emerging markets is expected to more than offset the ongoing deceleration in Chinese growth.
The bottom line on growth, inflation and interest rates – once again – is lower for longer.
As of January 20th, 2016, the advertised five-year lending rate stood at 4.64 per cent, unchanged from the previous Bank rate announcement on December 2nd, and down 0.15 percentage points from one year ago.
The next interest rate announcement will be on March 9th, 2016, while the next update to the Monetary Policy Report will be on April 13th, 2016.
If you’re thinking of buying a home, it’s important to act sooner rather than later. As the year goes on, affordability will continue to suffer as the demand for the smaller number of homes on the market rises.
statistics from - http://creastats.crea.ca/natl/index.htm