Now that the heat is on, will our housing market cool down? Prevailing wisdom in the real estate community is that in the summer months of July and August the market moves at a little slower pace. Through the pandemic there was never a hint of that traditional slowing. With America having mostly moved on from the dark pandemic chapter, will we find ourselves back in the summertime pattern of clients and Realtors taking vacations and shifting their attentions away from the housing market?
First things first, over the course of my career some of my best sales have come in the months of July and August. Still, we see lots of sellers holding off on selling, waiting until after Labor Day when the kids are back in school and we’ve got roughly a 10 week sales window before the holidays. Real estate, like nature, abhors a vacuum. It’s not like families take the entire summer off to travel. Or at least most don’t. The buyers are still out there during the summer, and there are less homes for them to choose from. This creates a perfect opportunity for motivated sellers because there less competition among sellers.
Having sold real estate full time since 2004 I’ve only seen one consistent period where the supply of homes was greater than demand, and that was due to a once in a generation (or hopefully once in a lifetime) economic recession. Our housing shortage is real and it’s chronic, and there are plenty of people with money in the Bay Area who are in the market right now, hoping to find their next home. Interest rates are high currently, but home buyers have become accustomed to these elevated rates. Many home buyers are purchasing now with the strategy of refinancing when the rates come down, which is expected in the next 12-24 months. Because inflation is coming down mortgage rates will eventually follow. It just hasn’t happened yet, and everything takes time.
My belief is that the housing market will not significantly slow down this summer. Buyers and sellers will be taking advantage of this period to realize their goals. Personally, I don’t like putting off selling homes until after Labor Day. The issue is timing. The 10 weeks before the holidays go by very quickly. If a seller wants to test a price that may be too high for 30 days, they aren’t leaving themselves much time. This is especially true if they come on the market in mid to late September. Every week becomes crucial as the days get shorter and the weather gets colder.