The Summer Slow-Down Myth Exposed
It is considered common wisdom that the summer presents both sellers and buyers with the annual seasonal slowdown, both in the number of listings coming to market and in the number of contracts signed. This is said to be the case due to the mass exodus of residents leaving the city for their Hamptons homes, European villas or Jersey Shore.
Now, while this might be true for those millionaires living among us (and there are plenty, to be sure), this is certainly not the case for the bulk of the properties responsible for a vast majority of sales volume nowadays, (buyers and sellers of apartments under the $1.5 million mark). Buyers in this range are quite serious and frustrated by the general lack of quality inventory, while sellers are motivated to make a deal and move on with their lives. The more people understand this reality, the less likely this “common wisdom” is to become a self-fulfilling prophecy.
As Fred Peters wrote on Warburg’s blog about the history of this wisdom:
Increasingly, as smaller apartments entered the sales mix, the seasonality curve flattened. It didn’t disappear, but it flattened. If you are buying a one or two bedroom, you probably don’t care that much whether you are buying it in January or July. You are not spending the summer in the Hamptons. And increasingly we live in a world of two income couples; most of THEM are not spending the whole summer in the Hamptons either.
So what does this mean for everyone?
· Existing Sellers: If you’ve been on the market for more than a few months, you might be considering pulling your property off the market and waiting it out unit Labor Day. Don’t! Instead, use this opportunity to freshen up your listing: 1) re-run your comps to make sure your price is competitive; 2) look at the apartment with a fresh set of eyes as it relates to staging, and 3) consider taking new pictures, particularly if you have outdoor space that looks greener now than it did a few months ago.
· New Sellers: Remember, waiting until the fall to list, while it may mean more traffic, also means more competition. Consider listing now full-steam ahead to take advantage of the general tightness in the market and today’s low interest rates to woo buyers. Just because you’re getting fewer buyers coming through the door doesn’t mean that they are any less motivated; quite the opposite. Those buyers coming to you now are likely to be more serious than during other times of the year, as they’re giving up barbecue and beach time to visit properties. Should any offers arise, engage them fully and negotiate every step of the way.
· Buyers: The hot summer months don’t mean you need to put your search on hold until the leaves start turning. If you’ve been in the market for several months and have not been finding properties in your price-point, you can leverage this time to test out wider negotiation margins for properties you do like. Furthermore, those savvy sellers who do list now (read above) are likely to understand the market well and are also likely to be priced correctly. Lastly, know that you are taking advantage of historically low interest rates. Who knows where rates will be in the fall? Work with your broker to stay on top of new listings as they come online so you can pounce on them, should they be the right fit.
To both buyers and sellers, take heart. The summer in no way means you can’t get what you’re seeking: a meeting of the minds with the other side. So grab your lemonade and flip-flops, and put your best foot forward! There are some great transactions to be had!