Seasonality in the San Francisco Homes Market Posted by NooshiAdmin in Blog, Market News 13 Jan 2015 Seasonality typically affects inventory levels, buyer demand and median home prices, often in significant ways – as is illustrated in the following charts. However, it is not theonly factor affecting market conditions and trends – general economic conditions and financial market movements, new construction projects coming on market, significant changes in interest rates, local stock market IPOs, natural and political events, and other factors can and do impact the market as well, sometimes quite suddenly. It should also be noted that new listings and new sales occur every month of the year – and sometimes, depending on prevailing market conditions and the specific property, buying or selling during the slower periods can be the smart strategy.Because there are typically summer and winter slowdowns, it’s difficult to come to definitive conclusions about the condition and direction of the market during July/August, and December/January. One really has to wait for the autumn market to begin in mid-September with the typical surge of new listings, or the spring market to begin in late February/March to get a sense of the ongoing dynamics of supply and demand, and how it will affect home price movements.The devil’s always in the details, and the details of the market change constantly. Still, there is a typical ebb and flow to the level of activity in the market that correlate with seasonality, and that is what this report explores from a variety of angles.Without inventory and buyers wanting to purchase, there is no market. These first 4 charts show the classic effects of seasonality on supply and demand.InventoryBuyer DemandAs seen in this next chart, the higher-price end of the market is usually more affected by seasonality that the general market. Among other effects, this will usually raise the median sales price during the peak spring and autumn selling periods, and lower them in the slower periods of summer and mid-winter (as delineated in the final chart).Note: In the chart, the changes up and down in sales are plotted based upon the sales of January 2013 equaling a base line of 100. This is a very approximate illustration, because of other factors that affect the analysis, though we do believe it reflects the market reality.These final 2 charts illustrate both the rapidly appreciating real estate market since 2012 and the shorter term ups and downs that seasonality can play in median home prices. For the last few years, spring has been the season of the greatest market frenzy, which shows up in Sales Price to List Price ratios and median price jumps. Of course, in an appreciating or depreciating market, there are usually other factors impacting median sales prices beside seasonality – as always, what is most meaningful is the longer term trend in home prices, not short-term fluctuations.Fluctuations in median sales prices are not unusual and these fluctuations can occur for other reasons besides changes in value, such as seasonality; inventory available to purchase; availability of financing; changes in buyer profile; and changes in the distressed and luxury segments. How these statistics apply to any particular property is unknown without a specific comparative market analysis. All data from sources deemed reliable, but may contain errors and is subject to revision.