Housing prices are affected by many variables and one of them is supply and demand. The more people striving to buy a home, the greater the pressure on home prices. If your life allows you to acquire a house in the off season, the fall and winter, you may have an opportunity to get a “bargain”. This applies to all markets. The data used in this article is for Oakland County. The concept however applies to all housing markets and the base year used is 2000. The chart below shows the average price of homes sold in in the respective years compared to the year 2000.
The housing market in 2008 fell precipitously because of the deep recession brought about by sub-prime lending which collapsed . It took until 2016 to recover from the losses occurring in 2008 and prior. The above chart indicates the average home price in Oakland county at the end of 2018 was 20.59% higher than at the end of the year 2000. It also seems that the market has got a ways to go to catch up for the losses occurring during the crash. Subprime lending is no longer a major factor affecting home prices and the demand for housing in Oakland County has been brisk over the last several years with most economist seeing very little slow down in the rise of prices.
Most home shoppers look to buy and/or sell a home in the late spring and summer months. This is mainly driven by the fact that they have children who are in the middle of the school year and they do not want to have their children be disrupted by switching schools, leaving old friends behind and making new ones in their new location.
This presents an upside to moving in the off season. Generally there are fewer buyers in the fall and winter months driven by their children’s school year and to some degree the weather. Frostbite can be a pain when moving.:)
One family’s constraints are often another families opportunity when it comes to buying a home. Let me help you take advantage of this if you are able to move in this off season.
The graph below demonstrates the price changes from 1985 to the end of 2017 and is from the Federal Reserve. The good news is the crash in housing prices was an anomaly caused primarily by sub-prime lending which is no longer a factor in the marketplace and ever since 2010 prices are moving upward. Further, prices seem to have a ways to go before they catch up with the trajectory they were on before the crash in 2008. If we extended the line beginning in 1995 out to say 2025 it would indicate that housing prices still has plenty of upside potential. Prices never move in a straight line, but it does seem to indicate that prices should be rising for some time barring any unforeseeable calamity. To be clear, the red dotted line was injected by the author of this article, and not the Federal Reserve, as an overlay to the graph created by the Federal Reserve.