Timing the Market ­– Part 1

Eric Stewart January 25, 2017

timing the market pt 1 @EStewartGroupRemember the old saying, “the early bird gets the worm”? Well, it’s true in many respects. When it comes to getting tickets for a concert, when you’re first in line, you get the best access to seats, right? If there’s a sale on Black Friday and there’s only a certain number of TVs being sold for a dollar, you can purchase one if you’re the early bird. Taking advantage of this basic economic philosophy in the sale of real estate works the same way it does in retail, or other parts of our lives – it applies to just about anything. The key is to bring your home to the marketplace at a time when the demand is at its greatest and the supply is at its lowest.

For instance, you’ve watched waves at the ocean, right? Remember when you see the water receding and watch as it pulls up to form a wave? That’s the moment where there’s a pivot point. You know the wave is just about to crash, it seems frozen for just a second – and then bam! It comes down. If you’ve ever tried to catch a wave, you know what I mean. The wave gathers up, the pendulum swings (so to speak), and then the wave collapses. Well, that is also true in many respects to real estate. Let me explain how.

Know Your Timing Window

Each year there’s a window in the Washington D.C. area, from the middle of February until the first week of May, when things are not yet at their prettiest. The azaleas haven’t blossomed and things aren’t green until sometime in mid-May, or often into June. In February, around Valentine’s Day, sometimes we have a foot of snow. Sometimes more. Sometimes none. Sometimes we have 55-degree days. Sometimes it’s 10-degrees.

What I have found, regardless of the weather and regardless of the economy – even in the midst of the 2008 – 2009 great recession, which is still lingering in some areas around the outskirts of the Washington D.C. area, is that housing inventory has dropped to its nadir. That means literally the very bottom, when inventory is at its lowest point, and houses that come on the market have the least amount of competition.

That’s the pivot point!

I start preparing houses in the fall to be ready for that low point. I’ll bring in my stager and coach my clients on how to get their home show ready. We work with them so that they will get top dollar. I meet with sellers who have unsold homes with other agents. Their homes’ listings have expired. They probably didn’t sell because they didn’t enter the market at the right time of year. These homeowners have tried to sell their home two or three times unsuccessfully and now think, “There’s just no market. What am I doing wrong? I’m just not going to sell right now.”

Let’s start by discussing your house and the potential sale of your property. Typically we would start in October. That gives us four months – quite a bit of time between now and when I would recommend you put your house on the market if you want to capture the ultimate pinnacle of demand over the nadir of supply. Some of you may feel you don’t have the time to wait until then. Fine. There is a market in the fall. I sell homes all year round, so there is demand out there. But demand is typically going to ebb by mid-November. And that’s the point when I try to “rest” most of my stock, unless it’s a vacant property.

Assuming you want to aim for February, which is the best time to go on the market, when the demand is the greatest and the supply is the least, we should systematically see a response within the market. When you list your home in February, March, and April you will see the greatest attention, which in turn will yield the highest price.

Let me tell you about my experience. Of the 100+ houses I’ve sold this year – and the same was true last year, and the year before and so on – 35% of my properties will sell in eight days or less because we timed the market. To put it another way, when you go to the ocean, if it’s high tide your house is hidden under the water with all the other houses (meaning there’s a lot of inventory and competition). But as the tide starts to go out, there’s less inventory to choose from, and less competition for buyers, so your house is clearly visible out in the water. In other words, if you put your house on the market in the middle or at the end of May, you’re actually coming to the market when there is the least amount of demand coupled with the biggest amount of inventory.

Timing is Everything

Last year I took a listing in Accokeek, Maryland. The property was on the Piscataway Creek, which is about eight miles south of 495, right off the Potomac River. It’s a fantastic waterfront property with 2×6 construction and a boathouse inside the house. The owner created railroad tracks, which allow you to pull your boat into the boathouse and shut the doors in case of inclement weather. When you want to take the boat out, you open the doors, drop the craft into the water, walk down the pier, and climb into your boat and motor down to the Potomac – it’s incredible. It also has an interior 40-foot lap pool in case you don’t want to go swimming in the Piscataway.

It went on the market in May. That was the wrong time of year. You might think, “It’s waterfront. Why wouldn’t you put that on market in May when everything’s the prettiest? Isn’t that the strongest time of the year?” The answer is no. Buyers traditionally start their search earlier in the year – February – April. Even May sales close in July and August, which is too close to fall. People want to enjoy the boathouse and the waterfront view for the whole season, which starts in late April. So when do you need to be on the market to capture that sale? February – April is ideal.

I sold a home in the late winter with a $300,000 hardscape pool set-up that closed in February. Why? The buyer wanted to have a pool and nothing else was on the market with a pool. Everybody thinks they have to wait until they can open the pool to sell it. Actually, that’s not the case. Take advantage of the timing of the market.

In general, think about the average house: four bedrooms, two-and-a-half bath, single family colonial, or a condominium or townhouse. The buyer is looking to make a move. What motivates people to make a move? Think about moving in general. It’s usually because something new has happened: I want to start a new chapter in my life, I’m getting married, we’re having a baby, or, I want to my kids settled and in a new school for fall. These are all major considerations.

So, there’s this wave action every year, that starts in February and ends in early May, when you, the seller, can capture the greatest demand for your property and have the least number of houses to compete with.

Contact me and I’ll be happy to walk you through this. Or take one of my upcoming seminars. You can also download some of our resources at here. I’ll show you exactly what I’m talking about in terms of timing.



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