Don't Gauge the Market by August

By Dave Fratello | August 14th, 2019

Hard to believe, but there are real estate markets out there in the world that don't operate year 'round.

Yes we know it sounds funny, because you get used to temps in the 60s and 70s around Manhattan Beach, regardless of the season. You can be out doing whatever.

But people can't go outside in many parts of the USA for months at a time. Not in shorts and topsiders, anyway.

You want to show a house in Minneapolis in February? Haha. Ever hear of a "snow-pen house?" Wait till Summer. Pittsburgh? Same.

It's this reality, hard to appreciate from within our bubble, that makes a lot of people think Summer is "the" time to sell a home. Barrels of ink have been spilled printing canned advice to would-be home sellers to get ready for Summer. Presumably some are dispirited when their MB listings don't sell during this supposed prime time.

No no no.

Just like Mexican food on the East Coast isn't, that generic advice about home selling doesn't apply to our lovely coastal community.

Seasonality in our market runs differently.

In Manhattan Beach, you avoid starting out a listing in the Summer months if you can. C'mon, people need some kind of break!

We've recently taken 3 new listings at our Edge real estate agency, all on waiver so they won't be marketed until at least Labor Day. 

That's because August often feels like one of the slowest months in town for sales activity. There are always plenty of listings, and some deals to be had, but the volume of purchases isn't there.

We decided to try to demonstrate this point with data.

This new chart shows the number of closed sales per month, averaged out across 7 years, 2012-2018. This period represents the busiest years since the market recovery after 2008-2010.

You'll quickly see here that the busiest months for closed sales are clustered in the early-to-middle part of the year. Given the time lag from listing, to accepted offer, to closing, assume the time shift to be about 45 days. If you want to know when most properties are going into escrow, it's February through June, with a little bit of July mixed in.

The number of closings drops for September, meaning July and August weren't as busy typically as February-June.

An uptick in average sales closing in October/November also shows what's coming: Our market's "second wave" of activity from Labor Day through October, with a trail partly into November.

The very, very slowest months for closings: January and February, again indicating that the period before, December/January, is the slowest in our market. (Well, maybe we're more like Minneapolis and Pittsburgh than we thought!)

We make the broader point here about seasonality to underscore an adage that we've come back to more than once: Don't gauge the market by how it feels in August. (Or December.)

We're actually quite busy in the office now, but you wouldn't see much outwardly. We're getting ready.

Now, our message for the Manhattan Beach market in general is: September and October have some work to do. Judging by some data, it looks like we took our Summer break this year a bit early.

We'll all give it a good run and see where things shake out. Oh, and remember in December, if it's one of those hot, crystal clear days with the Santa Anas blowing and Manhattan Beach feels like an island of paradise, we're not going to wonder why nothing is selling. It's just the calendar doing its thing.

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Nerdy note: All data is from the California Regional Multiple Listing Service, Inc. InfoSparks © 2019 ShowingTime.

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