Housing Report: Demand and inventory will drop with the holidays, but the market will remain hot.
The following article includes views from Reports on Housing by Steven Thomas, economics expert and experienced real estate executive, and is not a reflection of the opinions, views, or predictions of Nuvision and its representatives.
A new season is drawing near. Halloween is already behind us and the rest of the end-of-year holidays are quickly approaching. November and December are months marked by Christmas lights, extravagant displays in shop windows, and hot chocolate. It's also the beginning of the new season for the housing market—the holiday market.
The holidays mean less activity in the housing market.
Most people just want to relax during this time without the stress of reviewing home offers, touring new homes, or writing offers. New sellers who have been thinking about placing their home on the market usually hold off until spring.
Likewise, sellers who haven’t found success might pull their homes from the market, also looking forward to spring for a second shot. For the past five years, these factors have caused active inventory to drop an average of 27% by the end of the year.
Starting now, we can expect inventory to drop off through the end of 2020.
Winter also brings a freeze on the housing search for prospective buyers.
Discouraged buyers who have lost out on house after house will likely take a break to enjoy the season. Holidays offer a welcome distraction from the stress of a home search.
This is a yearly pattern. Based on averages from the past five years, demand will fall 31% from now until after New Year’s. With today’s demand at 3,019 pending sales, it is expected to fall to somewhere around 2,075 by the end of 2020.
Despite the slowdown, the market will remain hot.
While these seasonal trends tell us a lot about typical behavior, many buyers and sellers will continue their normal activities. To those who remain, the market will continue to be a Hot Seller’s market.
This is because demand and supply are dropping at the same time. The fast-paced feeling of the previous market will remain, with the only difference being fewer participants.
These predictions can be confirmed by looking at the pending sales at the end of December 2019, which were at 1,590. With the projected 2,075 pending sales for the end of this year, there is already more demand. We can expect a busier Holiday Market than we’ve seen in any recent years.