The spring real estate market is quickly approaching. This can be good news for both buyers and sellers. The summer months typically bring higher sale prices to sellers. It also brings a better selection of homes to buyers.

To illustrate seasonal variances, I will use statistics from Montgomery County, PA. I reside in Montgomery County and complete many house appraisals in this county.

The graph below charts median sale prices for homes in Montgomery County, PA over the past 10 years. Regardless of overall trends, this chart shows a definite drop in median sale prices during the winter months and a peak during the summer.

The peaks and valleys don’t necessarily reflect wide swings in property value. The mix of houses being sold is very different depending on the season. Spring and summer months are a popular time for families with school age children to purchase a home. The don’t want moving day to disrupt the school year. It becomes more complicated for families moving to a different school district. Homes purchased by families with school age kids tend to be larger, higher priced homes. This can account for some seasonal price variation. A larger proportion of home sales in the winter are smaller, relatively lower priced houses.

Many homes offered for sale during winter are the those that did not sell during the previous summer season. These houses often become stigmatized with extended marketing time and numerous price reductions. Buyers often perceive this as an indication something is wrong with the property. These homes become “clearance bin” properties. As a seller, this pitfall can be avoided with a pre-listing appraisal. You want to be sure your house is listed at a price that’s both realistic, and will bring you a full market value price. If you notice early on in the process that other homes are selling but yours isn’t, a post-listing appraisal will help you to adjust to a more realistic price level. You don’t want your house to fall into that dreaded clearance bin.

Inclement weather, holidays, fewer buyers and the school calendar year all work to drive up the typical time to sell a home during the winter. This is demonstrated by the graph below, charting median days to sell for homes in Montgomery County, PA over the past 10 years.

Within the first weeks of placing one’s home on the market, most sellers have expectations of getting their full asking price, or something very close to it. After weeks, and even months have gone by, sellers just want to sell. They become more willing to negotiate. This is evidenced by the chart below presenting sale price to list price ratios in Montgomery County. Despite an overall climb over the past 10 years, during every winter season sellers have typically received a lower percentage of their list price.

Winter home purchases can give you opportunity to negotiate a favorable purchase price. The downside is that with fewer homes on the market, it may be difficult to find the home you want. Winter home buyers often need to make more compromises. As more homes are placed on the market in anticipation of the spring market, more choices are presented. The downside of this is that sellers are typically less flexible with the sale price.

There is no wrong time of the year to purchase a home. It depends on how flexible your needs are, and your current personal and financial situation.