The spring market for 2023 starts today

Lilac
Lilac

There are a lot of misconceptions about the real estate market. One of them is that June is the month that the real estate season peaks with the highest prices and the largest inventory of homes for sale.

Most homebuyers prefer to buy in Spring even though waiting until summer usually means some savings and better service.

Last March was a very challenging time for home buyers. There were multiple offers on houses before anyone was even allowed to tour the house. Even with higher interest rates, I expect the same this year because the demand for houses is still higher than the supply.

In fact, it may even be worse this year as homeowners decide not to sell because they won’t be able to get the low-interest rate they have today.

Usually, we see the peak in home sales in April which means that offers are being made in February and March.  Homeowners still have to get their houses on the market in time for the seasonal peak in mid-March.

This is the week to interview Realtors and to have repairs made and any painting that needs to be done. The ideal time to put the house on the market is sometime in February, which at this point is next month.

Houses can be bought or sold any time of the year but the spring season starts today.

The high price of waiting for perfection

porchI am never going to say that “now” is a good time to buy a home or to sell one. There just isn’t one “now” that is best for everyone. However, over the years I have observed how much it can cost to wait for the perfect time, price and house.

Holding out for that perfect house in the perfect location that is a bargain can mean an extra decade of paying rent, as it rises each year while trying to save for a downpayment and missing out on building equity.

People who bought houses when interest rates were high generally paid less and refinanced later on. There are no guarantees when it comes to buying a house but most people need a place to live and in the long run, people who own real estate are able to build more wealth than those who do not own real estate.

There isn’t ever a perfect time to buy a house or to sell one.

There are seasonal variations in home sales

As we head into Fall we should see fewer houses on the market not that there are all that many on the market now. I mention this because the number of houses sold and the prices does fluctuate by season and we don’t want to confuse seasonal fluxations with those due to a changing economy.

These charts always look like roller coasters and this one shows how many houses are on the market or were on the market at any time during the last five years.  There are peaks and valleys. The local market is past the peak for the year and headed for the valley.

This seasonal fluctuation can mean opportunities for home buyers because they may be competing with fewer home buyers. Sellers can still count on a quick sale and prices are still going up.

Chart - MLS data
Homes for sale by month

There is a 1.3 month supply of housing in St. Paul

During a balanced housing market, there is a six-month supply of housing for sale. During a buyers market, the supply skews to

Purple Cone Flower

a supply that is greater than six months. During the housing crash which was a strong buyers market at times, there was a 10-month supply of housing on the market.

During a strong seller’s market, there is less than a six-month supply. Right now in St. Paul, there is a 1.3-month supply which indicates a strong seller’s market.

Some parts of the country might be experiencing a balanced market or even a seller’s market but that doesn’t impact the strong seller’s market in the Twin Cities.

During sellers, market houses sell quickly, and often they receive multiple offers. Look for prices to continue to rise this year due to the high demand for housing.

Housing supply is a measure of how long it would take to sell all of the houses that are on the market if buyers keep buying at the same rate.

Most of the news about the real estate market comes from the coasts and may not apply to our local market in the Twin Cities.

Marketing 101 – fresh photographs

Sometimes I take pictures of houses and gardens during the summer or fall so that when they go on the market in the winter I have some colorful and enticing

pictures to use for marketing.

Back in the days when it took a few months to sell a house, I would take new pictures of the outside if the seasons changed while the house was on the market. At a glance, the home would look like it just came on the market.

Right now I can easily spot houses that have been on the market for months because of the snow banks in the pictures. They may be great properties but buyers may assume that there is something wrong because the property has been on the market for so long.

Updating exterior pictures is a simple and inexpensive way to update the marketing for a home that has been on the market for a few months. Potential buyers will notice it all over again and who knows they may even make an offer.

 

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