Three things to keep in mind about real estate during the Fall months

How does the real estate market usually behave during the Fall? Let’s take a look today at three quick talking points to help explain the market in Sacramento. It’s not like I’m revealing mysterious truths below, but it’s powerful to be confident that the trends we tend to talk about are actually backed up by data.

1) Prices tend to cool off during the Fall months:

The median price very often sees a dip during the Fall months. This is normal, it’s what happened last year, and it is probably what is going to happen this year since the market tends to slow down after August. However, keep in mind sometimes the market really doesn’t see a seasonal price dip if values are experiencing explosive appreciation (see 2004 and 2012). At the same time, if the market is declining, the decline will very likely persist all the way through the fourth quarter of the year. We all know this since it’s Real Estate 101, but it’s good to actually see the trend.

2) Sales volume tends to decline during the Fall months:

Real estate is definitely cyclical, so it’s no surprise there are more sales during the Summer than the Fall. This is true every year in Sacramento County and really throughout the United States. Last year we saw a freakishly low number of sales as the market struggled to adapt to cash investors exiting the market and the looming government shutdown. This year we are entering the Fall market with more of a “normal” market, but one that already has a higher level of inventory as well as many overpriced listings.

3) Housing inventory tends to increase slightly during the Fall months:

Housing inventory tends to show a slight increase or at least hover at summer levels for a short period of time before ALWAYS showing a drop in December. Remember, inventory can increase in two ways: 1) More listings hit the market and outpace the number of sales; or 2) The number of sales declines while listings stay relatively the same. Case-in-point: Last year housing inventory saw a big increase from September to November, but not because so many more listings hit the market. The reality was sales volume hit a 6-year low during this time period.

Question: What do you think the best month of the year is to buy a home? I’d love to hear your take in the comments.

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