Questions Considered

  • Is the housing market seasonal? If so, when and to what degree?
  • When is the “best time” during the year to list/buy a home?
  • To be ready for when the market ramps up, when should I prepare to list/buy a home?

Data Analyzed

  • Montgomery County and the City of Rockville (i.e. within the city limits)
  • New listings which resulted in a sale, by listing month, from September 2012 to August 2014
  • “Distressed” sales (i.e., short sales, foreclosures and bank-owned properties) were excluded
  • Data source: MRIS (our area’s multiple listing service)

Results of Analysis (click on the graphs above to enlarge)

  • As most people would probably hypothesize based on anecdotal observation, the real estate market is, in fact, highly seasonal. The number of new listings:
    • Is lowest in December, then
    • Increases significantly through April and May, then
    • Slows down steadily from June through December
  • Across the year, the variation in the number of new listings per month is large. The number of new listings per month in April and May is 4X to 5X the number of new listings in December.

Insights & Conclusions

  • The market begins to ramp up in February and March, earlier than some may have realized.
  • For prospective home sellers, this means…
    • If you desire to sell your home in the first half of a year, it’s best if you’re able to list it for sale no later than March or April. This will ensure your home will be exposed to the prospective buyers who are ready to buy a home and who are entering the market in increasing numbers beginning in February and March.
    • If there’s work to be done to prepare your home for sale, you’ll want to get started on that at least a month or two ahead of when you want to list it – which, for a home to be listed in March, would be January or February.
    • If possible, avoid putting your property on the market in October through January, due to the limited number of serious prospective buyers in the market at that time.
  • For prospective home buyers, this means…
    • So as not to miss out on desirable properties coming on the market as the market ramps up, it’s best if you’re actively looking and ready to buy no later than March.
    • To prepare to buy a house, you’ll first want to determine your budget, decide what features are important to you, identify the areas/neighborhoods you’re interested in, and obtain mortgage pre-approval. To be ready to buy a house in March, you’ll want to undertake this preparation in January and February.
    • If you enter the market in November through January, expect a limited supply of desirable properties as compared to the rest of the year.
  • Further thought: Obviously, for an infinite range of potential personal reasons, timing the annual market may not be practicable. For example, if you learn in October that you need to relocate for a new job, then that’s when you’re going to put your house on the market. More generally, whenever it is that you’re looking to buy or sell a home, you’ll want to understand the current market conditions for the sub-market that’s relevant to you.