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Should I Sell My House In The Winter?
“Should I sell my house in the winter or wait until the spring or summer?” is a common question asked of real estate agents. After all, it’s generally understood that the real estate market is seasonal with houses selling fastest and for the highest prices in the summer. Recently one of my clients had a house he was flipping that would be ready to sell in January, but was wondering if it was worth selling in the winter or waiting until Spring to list it for a better sales price. I was curious myself what the data actually indicates, so I plotted some key data sets that tell the story.
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Average Sales Price By Month
This first graph shows average sales price by month, and you can clearly see that the prices spike in the spring, peak in the summer, and then decrease in the fall and winter. I didn’t plot it directly on this graph, but I calculated a 10-15% higher sales price in April vs January of each year. Looking just at this graph seems to reinforce the idea that it’s better to wait to sell your house until spring. But then we started to wonder if this is a case of causation vs correlation. Perhaps people with higher priced homes just wait until the Spring and Summer to list them. The 2nd graph addresses this question.
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Data from Realcomp MLS
Final Sale Price vs Original Listing Price
The graph below shows the ratio of the closing sales price vs the original listing price. A lower ratio means sellers had to drop the price of their house more in order to sell it. If the first graph showed causality between the seasons and a sellers ability to get a higher price, this graph should also show approximately 10-15% discounts in the winter vs the spring. However we don’t see that. In each year the ratio is only 2-3% worse in the winter vs the summer. This shows that indeed sellers in the winter are having to drop their prices by 2-3% more than sellers in the summer, but the 10-15% price increase in the first graph is simply due to more higher priced homes being listed in the spring and summer. (Note, one alternative explanation is that sellers of higher priced homes are actually intentionally pricing them 10-15% lower in the winter, which I do not believe is the case).
Data from Realcomp MLS
In conclusion, yes real estate is seasonal and houses do sell faster and for a higher price in the spring and summer months compared to the fall and winter. However, as I’ve mentioned in other posts, time is money. Those extra months you are holding on to your house are costing you mortgage payments, property taxes, insurance, utilities, and the opportunity cost of not having that money available for your next move or investment. Every situation is different, but in most cases those aforementioned costs, will outweigh the 2-3% in lost sales price. My advice is to sell when you want to sell. There are fewer buyers in the winter but also fewer listings to compete with.
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At VendCasa Realty we love crunching the numbers for clients. If you have a specific question about selling your home, how much it’s worth, or investing in real estate give us a shout.