By Gay Cororaton, MIAMI REALTORS Chief Economist
Mortgage rates are climbing up again, but mortgage rates are only one factor affecting the best time to buy a home. Seasonal patterns or permanent life changes— switching jobs, changing schools, buying a property while enjoying a summer vacation—affect the decision to buy and sell a property.
While conditions vary for each individual as to the right time to buy or sell a home depending on one’s personal and life circumstance, market conditions are also important to consider when buying or selling a home. As a buyer, you want to get a good discount and want a reasonable time to make your decision without getting too frantic about competing with other buyers. As a seller, you will likely desire to get the highest price for your home, sell it within a reasonable time, and not let the property sit for so long that can lead to price reductions, making buyers wonder whether this is a good home to buy and if they are indeed getting the right value for the property.
MIAMI REALTORS® analyzed sales data from 2012 to 2019 in the Southeast Florida counties of Miami-Dade, Broward, Palm Beach, Martin, and St. Lucie to understand the best time to buy and sell a home. (2020 and 2023 are disregarded due to the effect of COVID-19 shutdown, the sharp decline in mortgage rates in 2020-2021, and the ascent in 2022-2023 that distorted seasonality patterns).
1) Home sales start ramping up from January and peak in May for most counties. The average sales in May from 2012-2019 (1,990) was 54% higher than the average sales in January (1,291). Sales pick up somewhat again around November-December.
2) Cash buyers make up a larger fraction of the first quarter sales. In February, 56% of buyers paid all-cash, compared to 47% of buyers in August. Many of Southeast Florida’s boat shows occur in January and February, and these boat and water loveres could be shopping for properties around this time for coastal properties.
3) There are more listings in the first quarter and the number starts to decline through the months (despite higher demand) but increases in October, and then falls again to the lowest level in December.
4) For a buyer seeking a lot of options, the best time to buy a home is in the first quarter where months’ supply is at about 6.5 months on average for single-family or condo/townhome sales. The month’s supply falls to its lowest in December to 5.5 months.
5) Properties tend to sell more quickly as the year goes along. For example, properties that sold in February were on the market for 65 days compared to sales that closed in August that were on the market for 54 days. Note that the sales that closed in August likely went into contract in June or July.
6) With more properties on the market and less competitive conditions, buyers get a better discount in the first quarter. The average of the median sales to list price ratio was 93.8% compared to 94.8% in August (again, these sales likely went into contract in June or July).
What this Means for Realtors® Seasonal patterns or permanent life changes— switching jobs, changing schools, buying a property while enjoying a summer vacation—affect the decision to buy and sell a property, so understand your client’s circumstances to help them get the best value for the home they will buy or sell!
