What is Seasonality?
Although you may already be aware of the strength of real estate prices over the last several years, market prices rarely move in straight lines up or down. Rather, prices follow cyclical patterns of relative strength and weakness. When valuing a home, it is important to evaluate how these seasonal factors impact the value of your home.
Charleston area home prices: http://www.charlestonrealtors.com/wp-content/uploads/2017/07/CTAR_MMI_2017-06.pdf
The May-June period is typically the strongest time of the year for real estate as buyers flood the market in search of new homes; and this certainly bears out in our analysis of Charleston. In 2016, for example, median home prices in our area peaked in June, then slid over the remaining months. In fact, from the June 2016 peak to the January 2017 trough, median home prices fell just over 4%. And that is no small change when it comes to home values. This 4% decrease over a six month period of time represented a $12,000 decrease in the value of a $300,000 home. This should not be alarming, but merely recognized as part of the predictable seasonal swings in the real estate market. By May of 2017, median home prices had gained all that they had lost in January and then some.
Even though home prices can generally be strong, like they have been over the last several years, realtors should always be on the look out for the impact of seasonality when recommending a listing price. Below, you can see the role seasonality played in Charleston area home prices from 2016 to 2017. The early winter time period tends to mark a seasonal low, and the late spring time period, a seasonal high.
The Bottom Line
The value of your home is based on what people are willing to pay. When more buyers enter the market in late spring, valuations go up. When less buyers are in the market in late fall and early winter, valuations go down. An experienced real estate agent can help you understand the role of seasonality when listing your home.