Buying and selling real estate property isn’t always as easy as it may seem. Many factors, like supply, demand, location, marketing, and buying season, may affect the buying or selling of properties successfully. For a full guide on when the best time to buy or sell a property is, stick with us till the end.
Most Important Factor
Even more than the location, the seasonality of the real estate market matters when buying or selling a property. Seasonality is affected by weather, the holidays, the school calendar, etc. These are more commonly known as cyclical patterns.
For example, late spring, around May, is one of the most profitable times to sell any property. As per a real estate report (ATTOM’s analysis), properties sold in May acquired a 12.6 percent seller premium.
Apart from the weather, the school schedule also influences the seasonality of the real estate market. For example, you will seldom find a family willing to uproot their kids and disturb the school schedule in the middle of the school year. Such families will wait until late spring or summer break to crack the deal on their new home.
We can’t ignore holidays either. Few people move during the holidays as they have family ties, end-of-year obligations, and much more to cater to. Hence, the holidays aren’t a great time to buy or sell properties.
For people who frequently invest in fixed and flip property, understanding the seasonality of the real estate market is highly significant. Here are some more tips and tricks to help you ace the seasonal market when buying or selling a property.
Buy in the off-peak season for a bargain or a great deal: wait till the off-season to buy any property. Fall or winter are your best bets if you are looking for a higher profit when flipping a property. The market is slow in winter; you may find a suitable property with little work or repairs needed and be able to fix it before summer approaches.
Buying in the off-season will only fetch a good profit when you sell in the peak season. Use the off-season to fix, repair, market, and stage your property so you can trade in peak season. Compared to winters, late spring, and summer will give your property more exposure and spotlight, especially if it’s a family house.
If you want to ace the seasonal real estate market, you need to understand your project, timeline, and the duration of your fixing and flipping. You can fetch a good profit if you factor in the time and cost of the work. Moreover, how your timeline will affect your holding costs and profit margin is essential to consider as well.
How does seasonality affect your decision as a buyer? Well, understand that during the high season, the demand for family houses increases. The competition is higher, and there are more bidders on the market. There is a good possibility that you may lose your dream house to a higher bidder when the season is at its peak. However, if you have no option other than buying a home during summer or spring break, you will have limited options and higher prices.
Selling when everyone is buying and buying when everyone is selling is the best way to do business in the real estate market, but that’s not how the real world works. For a home flipper, your best bet is to buy in the off-season, like the winter and holiday seasons, and sell at the start of spring or end of summer. Buyers tend to hibernate in winter, and hence, you will have better options to explore. From winter to late summer, you have all the time to fix, market, and stage your property for a successful sale in the summer.
Work with RCN Capital, the leading nationwide lender for real estate investors, to get the most out of your fix-and-flip properties. We offer short-term fix and flip loans custom-designed to suit your real estate goals. Connect with us today to discuss your next real estate investment.