Seasonality on property markets is a real thing. Sale prices and demand can fluctuate massively with the weather, which is definitely worth knowing if you plan on putting your home up for sale. This article by Jack Blows, Director at Legra Homes explains what you need to before selling your house.
Property Sales And The Weather
The weather is a major factor in when to sell property as buyers hibernate during autumn and winter (i.e., the cold season) before re-emerging in spring and shopping around until the end of summer (i.e., hot season). For this reason, seasonality should be a determining factor in your decision-making process.
On the one hand, the “cold season” is traditionally characterised by a drop in the number of properties for sale and weak demand that freeze price growth, and even force it to decline. On the other, during the hot season, regardless of how many properties are on the market in the UK (though generally more), prices tend to rise. In fact, this annual cycle is so prominent that it can even be tracked simply by following the news. Take a look at these headlines by one major online property broker:
12 December 2014: “Home prices catch a winter chill”
12 March 2015: “Home prices take a spring leap”
12 August 2015: “UK property drought worsens driving prices up”
15 December 2015: “Stock levels crash but price hikes take a seasonalpause”
11 March 2016: “A frenzy of buying across the UK”
What all this means is that putting a house on the market during the winter is a pretty solid guarantee that it will take longer to sell, and that’s risky. After people see a “For Sale” sign on the lawn or an online ad up for too long, they start wondering what is wrong with the house. This additional doubt, which may be unfounded, makes the sale harder and can often lead the owner to negotiate a discount in order to clinch a deal.
Include Local Market Trends In Your Research
Don’t forget to include local market trends in your calculations too, because all property markets are not equal. For example, property in London in January 2016 took 58 days to move off the market, compared to just 43 in April this year. In the North, the sale time is exponentially longer. According to Rightmove.co.uk, it takes about half a year to sell a home in Darlington, Co. Durham on average, the same goes for Bradford and Wakefield in West Yorkshire and St. Helens in Merseyside. Meaning that, in order to capitalise on seasonal demand, you would need to put your home on the market when spring starts, just in case it does take six months to find a buyer.
Seasonality, Micro Booms And Micro Busts
Leading banks, Halifax and Nationwide, both track house price data and confirm the existence of these micro booms and busts, this is why their house price indices are “seasonally adjusted”. Nevertheless, this curious phenomena is a bigger threat to individual sellers, not dampened the underlying market growth trend. Currently, the UK is in the grips of a historic housing crisis that is swallowing up the supply of houses, forcing people to bid higher and higher to secure a property. Granted, this may not be great news for buyers, but for long-term owners looking to sell, it means that your house is worth about 251 per cent more than two decades ago!