The sudden outbreak of the COVID-19 pandemic has upended the seasonal home buying pattern in the United States. The housing market was in a downturn in early 2020 when the pandemic hit, but activity has picked up abruptly as buyers look for more spacious housing, driven by ongoing restrictions and easy telecommuting policies. Some buyers may want to wait until market activity has slowed down and seasonal patterns have come into play again and there is more clarity on what the future holds.

  Before the pandemic, market activity tended to follow a predictable seasonal pattern, with homebuying activity picking up in the spring and summer as buyers looked to close new home deals before the start of the school year, before falling back in the fall and winter.

  However, since the end of 2020, the number of house purchases has risen sharply, resulting in a general shortage of inventory in the real estate market in various cities. The limited selection of houses means that buyers have to face the double attack of fierce competition and price increases. This forces buyers to act quickly at all times, making it difficult to time and make long-term plans as in the past.

  Those trends may have slowed this year, but there is still a long way to go before inventories return to levels favorable for buyers.

  Danielle Hale, chief economist at realtor.com, a real estate portal, said: “We expect home sales to remain at a relatively fast pace, although competition among buyers may not be as intense as last year. Housing construction is doing well, but we are seeing fewer homeowners looking to sell compared to the same time last year. While the market is taking a small step in the right direction, rapid home sales and price growth are also indisputable.”

  In some markets, seasonal patterns are still missing. In South Florida, for example, this once-characteristic seasonal market has been hot throughout the year since the onset of the pandemic.

  “In the past two and a half years, a lot of people who are on the sidelines have made the decision to move,” said Dana Koch, a Palm Beach-based broker at Corcoran, a real estate agency. “In addition to the pandemic, taxes have also prompted them to increase their home ownership plans. Important factor on the agenda. Most of them are from high tax states like New York, New Jersey and California.”

  Rapidly depleting inventory is also plaguing markets in Washington, D.C. to the north and the California Bay Area on the west coast. Realtors say buyers who want to close a deal in the coming months must be ready to grab a listing as soon as they come across it.

  “Compared to last year, buyers need to make up their minds in less time,” said Nurit Coombe, a Washington, D.C.-based broker at The Agency. “Our mission is to prepare our clients to search for the right home, sometimes Target even before it goes public.”

  A number of economic variables could slow home buying activity this year and prompt a return to seasonal patterns in the housing market.

  "A lot of factors can play a role, but interest rates are definitely the number one priority," said Jeff Samuels, The Agency's Northern California agent The trade-offs. If housing becomes unaffordable, ultimately demand will also weaken.”

Why most markets haven't returned to seasonal mode

  The biggest impediments to the market's return to seasonal patterns come from a nationwide housing shortage caused by a home-buying spree triggered by quarantine measures during the pandemic, and the fact that the current pace of home construction cannot keep up with strong demand from new buyers.

  "If you compare the rate of household formation with the rate of home construction, the cumulative housing shortfall over the past decade could be as high as 5.8 million units, setting the tone for longer-term market movement," Hale said. "While builders are ramping up capacity, the shortfall is It's just too big, and there's more competition among buyers than ever, and low mortgage rates have contributed to a hot market."

  In some markets, tight inventory presents more challenges than others. For example, demand levels in South Florida have been particularly strong throughout the pandemic, with large numbers of buyers attracted by favorable tax policies and a comfortable climate and lifestyle.

  “Buyer demand seems to be endless, especially for newly renovated or newly constructed homes, and they don’t want to be tangled up with contractors due to supply chain issues or schedule delays,” Koch said.

  He added that the number of second-hand homes on the market was also low, as sellers were also concerned about whether they would be able to find a suitable new home if they sold their existing home.

  In Washington, D.C., as buyers look to lock in deals while interest rates are at record lows, inventory levels this year are less than last year, Coombe said.

  "While sellers are pouring into the market, there are a lot more buyers," she said. "The market doesn't seem to be seasonal at the moment and has been very strong throughout the year."

  In Northern California, the most vexing problem isn't the lack of new listings, but the fact that homes are selling too quickly.

  Samuels said, “While there are few listings on the market, real estate transactions are plentiful. In one of the counties I cover, the number of housing transactions has been increasing year after year. The problem is that the level of demand is only just matching the housing stock, or has gone too far. far beyond."

  Still, there are signs that seasonal patterns in real estate activity are returning in some markets.

  "Seasonal patterns are largely related to the home buying decisions people make for their families, with buyer demand being influenced by the school year and also by how sellers respond to the market," Hale said. "We typically see more in the spring. Household sales, and some markets are more likely to be dictated by seasonal patterns.”

  New York is one such example. Buyers looking to jump into the market at a time when competition is relatively slow can still do so.

  “At the end of the year, you have the opportunity to find a good deal because sellers don’t want to compete with new listings coming on the market in February and March,” said Lisa Chajet, a New York-based broker at Coldwell Banker Warburg. There are also a lot of high-quality listings on the market, and if you take advantage of July and August when people go on vacation, you can get a head start.”

Typical strategies help buyers stand out

  Buyers looking to stand out in the increasingly competitive U.S. real estate market can turn to typical tried-and-true strategies, such as getting loan pre-approval, all-cash payments or waiving surprise terms.

  They should also keep in mind that low inventory can also hinder sellers.

  "About a quarter of sellers say they can't find affordable housing in the current market," Hale said. "We often assume that inventory will only make things difficult for buyers, but in reality many sellers It’s a buyer itself, so it’s a challenge for both sides of the transaction.”

  For buyers, one of the winning strategies is to offer some flexibility in terms of deal deadlines for sellers who may not be able to find a new home right away.

  "Some sellers want them to stay in the house for a while after the deal is closed, before moving to a summer home," Koch said. "For this reason, some buyers have expressed their willingness to postpone the closing and provide other conveniences so that the seller does not feel that there is a problem." pressure."

  Other buyers may want to wait until market activity has slowed and seasonal patterns have come back into play and there is more clarity on the future. Meanwhile, buyers using financing to buy a home should also keep an eye on interest rates, which are expected to rise this year.

  "Some people want to wait until the market cools because they think it's going to be accompanied by a big drop in house prices," Samuels said.

  But if interest rates rise by two percentage points, how attractive is a 10% price cut? It mainly depends on your payment method. "

  Chajet noted that even if interest rates start to rise, they are likely to remain relatively low.

  "If you have the cash, it's still better to buy a house in New York than rent," she said. "Sellers are afraid that new listings in the spring will make them uncompetitive, so I tell clients that now is a good time to get in."