In this month’s National Association of REALTORS® Power Broker Roundtable, industry leaders discuss market seasonality.
Cindy Ariosa, Senior Vice President, Regional Manager, Long & Foster Real Estate, Chantilly, Virginia, Liaison for Large Firms and Industry Relations, National Association of REALTORS® (NAR)
Cindy Ariosa: To say that 2020 tilted the world off its axis might be an understatement. The impact of it has been felt across every industry and every facet of our lives, and most certainly in real estate, where pandemic-fueled activity during the past 12 months soared to unexpected levels. The typical slow-down through the holiday season and into the first quarter simply never happened, as low interest rates, low inventory, and the opportunity for so many people to work remotely energized the clamor to move. Now, as we sit on the cusp of April, what will the spring market look like? What can we expect in the months ahead? Will seasonality matter going forward?
Linnette Edwards: It certainly didn’t matter in 2020, and it doesn’t look like buyers and sellers are looking at the calendar now. We continue to track spikes in the median sales price and decreases in the number of days on market as the competition for available inventory—one of our agents likened it to “The Hunger Games“—remains intense. You might say the spring market of 2020 never ended.
Mike Brodie: That’s basically because the drivers—as you described them, Cindy—show no signs of slowing. Add to the mix the influx of millennials to the market, many of whom are wisely choosing this as the right time to buy, and I agree—there is no spring market to look to this year because it’s been spring-like for many months. When and if it slows will depend in part on when mortgage interest rates begin to rise.
Tracy Kasper: And also, on the issue of the remote workforce: I think there may be another migration as companies go back to the office. Jane Doe may have to pack up her island getaway and go home in order to keep her job.
Joe Clement: No matter what, the shortage of inventory, which is literally crucial, will keep the market hot for a while.
CA: It’s possible things will settle down a bit once the kids go back to school—and we all know that what goes up must come down at some point. That goes for demand as well as interest rates. So, is it fair to say we may see a return to seasonality, perhaps as early as next year? Or are we looking at this as a new normal—and if we are, what strategies make sense looking ahead?
LE: In Northern California, it’s the best seller’s market we’ve ever seen. Our marketing director sold her 2,550 square-foot home in the Silicon Valley for $1.2 million in days and bought a home 1,000 square-feet larger in North Carolina, where she’ll be working remotely, for $595,000. But while the pandemic may have forever shifted what buyers want in a home—and where they want to live—I think the new normal requires us to understand the metrics and keep careful track of inventory in order to reach a more balanced market.
JC: We’re advising our agents to shake the bushes for sellers—work your databases, stay in touch. We have Zoom meetings every week—a huddle we call it—where agents can collaborate and share community intel.
TK: Without question, technology has been a major factor in the success of these past months—maybe the best thing to come out of this pandemic. I think, as people become more or less settled, we will see some return to seasonal peaks and valleys. Until then, we need to be the local market expert—expert enough to give buyers and sellers the very best advice in this moment, whether it’s “Sit tight,” “Sell now” or “Let’s take a look at pending sales.”
LE: One strategy is to become an expert in MLS data analysis. Review pending sales to check on the true activity level. Prep homes regardless of seasonality—and be ready to list on a moment’s notice or pause for a few weeks to track inventory.
CA: Good advice in any season.
MB: The fact is, the market has no emotion. It’s dependent on the emotion of buyers and sellers. But one thing is typically true in any market environment: 20% of the agents will do 80% of the business. As rates creep up and demand slows down, which they surely will at some point, the agents who are going the extra mile today to help clients navigate a complex marketplace will thrive in every future market, seasonal or not.
For more information, please visit www.nar.realtor.