You heard me right. We are about a month away from the annual market slowdown. You maybe saying, “Dan, you’re crazy. There is no inventory! It’s only June! The market is hot. It’s a seller’s market!” Yes, I have heard all this before, and if you are like me and study trends, you know that the slowdown is coming. Go back and study the sales numbers from 2012, 2013, and 2014. In Denver, we have followed the same pattern every year for the last three years, and there is no indication that this year will be any different. The market starts out as hot as it could be in March, April, May, and June. Then once we get past the 4th of July, something happens. The market takes a dip and doesn’t recover to the same level of sales for the rest of the year. Do sales occur in the last five months of the year? Sure, just not at the same frenzied pace of March through June.
Can we explain why this keeps happening every year? Not really. Some could point to the start of the school season, some could point to the seasonality of fall and winter, but neither really explains the dramatic drop in sales as compared to the first seven months of the year.
There are also several economic indicators to suggest that the slowdown is coming again. The stock market has been on a roller coaster ride for the month of May. All indications point to a rise in interest rates in the next 60 to 90 days, and there is a general slowing of the economy. Oil prices are inching up again, and home affordability is at an all-time low.
What does this mean for consumers in the real estate market? For sellers, it means to get your home on the market now with a real estate professional. Sell NOW and get a premium price. Don’t worry about what you are going to buy; you can always rent until the perfect home comes on the market. We have a list of temporary housing solutions for you (besides, inventory is going to loosen up here very soon).
For buyers, it means buy NOW! Remember, nothing affects your monthly mortgage payment like interest rates. A bump by a half or a full point can mean several hundred dollars more a month you’ll be shelling out for the same home you could have bought before rates went up.
If you are thinking, “I’ll just wait until next year,” you’ll be rolling the dice. Good luck timing the market in an election year. All bets are off as to the status of the market during a Presidential election.
Dan Polimino is a Broker/Owner with the Colorado Dream House Team, Keller Williams Realty DTC. Contact the Colorado Dream House Team at 720-446-6325, Follow us on Twitter, Like us on Facebook, Watch us on YouTube, Questions?