13 Feb Why Spring might NOT be the best time to sell – John Lindeman
John Lindeman turns an old theory about Spring as a great time to sell on its head and he has the research to back it up.
Kevin: We hear all the time – don’t we – that spring is the best time to sell a piece of real estate. What about when is the best time to buy? Is it true? John Lindeman from Property Power Partners has done some research on this, and I guess he’s going to flip the table on us.
Good day, John. How are you doing?
John: Good morning, Kevin, and hello everybody.
Kevin: John, just before we get into that, I believe you’re going to be sharing some wisdom. You have some seminars coming up in Sydney, Brisbane and Melbourne. By the time we get to air with this one, Sydney will have happened, but when are you in Brisbane and Melbourne?
John: We’re in Brisbane for the first time on the 21st of February – it’s a midweek evening event, and in Melbourne the 27thof February. These are free events, and the ones we held last year in Sydney and Melbourne were fully booked out very quickly, so I urge people to attend.
Kevin: Okay, the 21st and the 27th of February. You can get all the details by going to the website that we’ll link here in this interview. It is called 7steps2success.com.au, but there is a link inside this article.
John, is spring the best time to sell?
John: That’s what a lot of people would have us believe. They assure potential vendors that more buyers venture out once the cold and wet weather is over and fewer people go house-hunting in summer because that’s when they take their annual holidays. They also say summer, then, is the best time to buy because there’s less competition, and it seems to make perfect sense.
But I had a look at this. I did quite a bit of research and wrote an article for Your Investment Property on this in which I’d thought “Well, let’s have a look at what regular changes occur both in the number of sales and also the number of listings and whether these have an impact on prices.” I did this for houses and units, so it was quite an intensive study.
What I discovered was an amazing thing, and that is that there’s no real variation in sales over time. In fact, the number of sales in places like Sydney have been going up over time, but there’s no seasonal variation. And I thought “Why is that?”
The reason is the way in which we go about buying properties nowadays. It’s all done online. We do our initial research and we go to listing sites, and it’s all done via the Internet in the comfort of our own homes. We can do this at work or when we’re on holidays, and we can ask for information via e-mail or phone.
So, the Internet has really been a gamechanger, and it means that sales volumes don’t actually behave in the seasonal way that they may have done years ago when we used to go out and physically look at properties and get the newspaper and so on.
Kevin: What it really means, John, is that we might get more listings in spring, but that indicates that buyers have more choice in spring.
John: That’s exactly right, and that’s what happens, because people think “Oh, spring is the right time to sell a property,” so more vendors put their properties on the market in spring, and fewer of them do in summer because they think there are fewer buyers out there during the summer holidays or during the colder winter months and less competition.
But what the research has showed us is that that’s not so, and actually, it has the reverse effect of what they intended, as you just said. There are fewer properties for sale during summer, and that means it’s a better time to sell.
Kevin: You’re better off listing your property when you don’t have as much competition. Your property is going to stand out a lot more, too, John, isn’t it?
John: That’s right. And the difference can be quite substantial. When we looked at the price variation, it was from 5% to 10% in median price variation from one season to the next. So, that outweighs any trend changes that might be taking place.
The lesson from this is if you have a choice, it pays you to use seasonality to your advantage, and spring is really the best time to buy a house or a unit because the number of properties on the market is higher and median prices tend to be a bit lower. But summer is the best time to sell, because the number of properties for sale is lower, and therefore median prices are a bit higher.
Kevin: It’s a great study, and it has changed my thinking about the times to buy and sell, because it makes sense to be buying when you have less competition from other buyers, and it’s better to sell when you have less competition from other sellers. So yes, it makes a lot of sense.
John: That’s right. It does, and the numbers have proven that that’s the way our market behaves. So, now you know when the best time to buy and sell is.
Kevin: The two seminars you’re doing in Brisbane and Melbourne on the 21st and 27th of February, 7steps2success.com.au, what will you be covering in that seminar, John?
John: It’s a free event, and we look at all the different things that people need to know about the market – which areas are predicted to boom in your particular state, how to avoid the mistakes that people make such as seasonality, know where prices are likely to rise and where they’re likely to go backwards, understand how the market works, and pretty much be fully equipped, so you can’t really afford to miss the information that we put together in these events.
Kevin: That website again is 7steps2success.com.au. Those seminars, 21st of February in Brisbane and 27th of February in Melbourne with John Lindeman. John is from Property Power Partners.
Thanks for your time, mate. We’ll catch you again soon.
John: Thanks very much, Kevin, and I hope to see your listeners at one of the events soon.