The Hairy, Scary, Winter Market (A Myth)

Every winter I do my best to combat the stale advice we’ve been hearing for decades – “wait until spring to sell your home.” This year, the evidence to the contrary is as compelling as ever.

Take a look at the chart below as an example, then read on...

It is undeniably true that the number of buyers in the winter market is only fraction of the number of buyers during the summer. However, that’s only half the story. What matters most is not simply how many buyers there are but how many buyers there are compared to the number of sellers. Judgments shouldn’t be based solely on demand but on the relationship between demand and supply.

Let’s say you’re a potential home seller in Anyville, IL, deciding when to sell. And let’s say that during any time of year, like clockwork, every month three people purchase homes in Anyville. In the summer, usually 10 homes are on the market at any given time. And in the winter, only four homes are on the market at a time. Yet month in and month out, regardless of how many homes are available, exactly three of them sell. So in summer, the three buyers choose from 10 homes; three homes sell, and seven don’t. In winter, three buyers choose from four homes; three homes sell, and only one doesn’t.

During which of those markets would YOU rather sell?

In reality, demand for real estate isn’t fixed throughout the year - it does decrease during winter. However, the SUPPLY of real estate decreases even more, which skews the market in favor of sellers. In fact, according to a National Association of Realtors survey done last winter, the single most common complaint from winter home buyers is that there is not enough inventory to choose from. What about the weather, wasn’t THAT a popular complaint? It barely made the list. Why? The NAR also found that 89% of home buyers use the Internet in their search, so when it’s 20 below and sleeting, you’d better believe buyers are looking at homes. They’re just doing it while curled up in front of the fireplace, rather than trudging through the snow.

And as for waiting until spring? Well, that might not be such a good idea. Demand increases gradually and steadily from around December through May or June. Supply, however, increases suddenly and drastically in March, FAR outpacing the increase in demand. The result is that March is actually the single worst month of the year to sell a home. In no other month is the supply-and-demand relationship skewed more in favor of buyers. 

So if you’re still thinking of “waiting until spring,” it would seem that what your momma told you about not “jumping off a bridge just because everyone else is doing it” might be the best advice you could hear.