I recently read an excellent blog post by Gary Kristensen (click here to read). I thought I would similarly take a look at the Chicago market and try to graphically depict the best time to buy or sell in the Chicago real estate market. As we all know real estate is seasonal in most markets with the school year being a big factor, but more so in Chicago due to the blustery winter months.
I exported every monthly data point from the S&P/Case Shiller Home Price Index dating back to 1986 (that’s 336 total data points and 28 monthly data points which should be a large enough of a sample to account for any outliers). I then averaged each month and charted the results…..
As you can see, it appears as if the worst times to sell would be January through April (all below the yearly average). Also, keep in mind that these are closed sales which most likely went under contract 1-3 months prior. So while August appears to the best, those homes most likely went under contract in July and originally listed for sale in April or May (assuming a 60-90 day marketing time).
As Gary astutely points out in his post, most people who are selling a home are also buying a home. Therefore, in these cases, trying to time the market isn’t necessary. For those who are only selling, it looks like listing in May or June would be best (assuming we add 60 day marketing time and 2 months to close). I have also heard an interesting thought from one Realtor who said he loves to list a home and have an open house the Sunday in February after the Superbowl. He said he does this to get ahead of the market and also he gets a tremendous amount of traffic. He thinks it is because many women who want to get a head start looking at homes are finally able to get their husbands out of the house on a Sunday. This is clearly anecdotal evidence (and kind of funny), but an interesting approach nonetheless.
Oddly, December had the second highest average that I could not account for. I showed this to a few other real estate appraisers. They weren’t sure either and thought this could be corporate transfers coming in prior to years end for write offs to people trying to close before the snow comes. If you have some thoughts are what is causing this spike, please add them to the comments below. Also, when is your favorite month to sell.
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