Is it spring (market) yet?
Sometimes it gradually flips, while other times it happens abruptly before many of us even know it’s flipped. Or is it flicked? Either way, there is a thing that happens in a real estate market and it is the ebb and flow between different market climates.
While we have seen some of the most jarring flips in history over the past eight years, there are some switch flips that happened every year regardless of market conditions, and that is the transition into the spring market.
Some spring markets happen earlier than some while others are later. The contributing factors can include the weather, while the overall supply and demand dynamics typically are the major drivers. How are people feeling? Cautious? Optimistic? Cautiously optimistic?
For example, coming into the end of 2019, 2020 set up for a massive spring market which was only delayed by COVID.
The end of 2021 and early 2022 was a borderline runaway train market which was quickly derailed by the Bank of Canada opening the firehouse of rate increases.
But when looking at more ‘normal’ markets, the spring market happens in some form or another, every year.
What does a spring market look like?
Looking at sales numbers going back to 2011, aside from COVID 2020, sales in March were up 60-120% more than sales in January. Even 2024, a year that posted underwhelming spring market data, was up a notch under 60% for sales from January to March.
How about sale prices? Including early 2020 (COVID) and early 2022 (Bank of Canada), the average sale price of a home in Niagara was up, on average, 8.7% from January to April. That may be more impacted by the median price rising, but still, the numbers show that March through May are when the action happens.
What are some of the telltale signs that the spring market is near?
Here are our Top Five Signs of the Spring Market.
- “Getting started” activity. This is sellers asking agents to provide them with a current market value on their home. As well, it is buyers getting their mortgage approvals done so they know what they can afford.
- Open House traffic. While it is rare that an open house visitor will buy the house they’re visiting, these people are typically on an education mission. They are looking at what is out there so they can get a better understanding of market conditions.
- Showing activity. When looking at a fairly typical home (for example, a 3 bedroom, 2 bath bungalow in the north-end of St.Catharines or Niagara Falls), how much showing activity is it getting? Has it had six showings in the first three days? Or were there only inquiries but no showings.
- Short term data. We look at the weekly numbers of new listings compared to sales. And then, we look at the percentage of those sale prices relative to the asking price, and finally, the days on the market data. High sale to list price ratios coupled with lower days on the market is a sign of a spring market.
- Realtor anecdotes. We are constantly chatting with other Realtors. The busy agent is often the best litmus test for how the market is going. What is the tone of the conversations they’re having with clients? Is the mood positive or negative? Are people sitting on the fence or are they jumping in with both feet?
A funny thing happens when those five points turn more positive. A fear-of-missing-out kicks in and suddenly we see motivation increase. People are more apt to say, “let’s go see it today!” than they are willing to wait until the open house on the weekend.
Motivation increases at the same time as the seriousness of their actions. As we approach the middle of March here in Niagara, we are coming out of what was an intense, oddly authentic winter. Now that warmer weather is upon us, we will continue to watch the short-term data as we transition into what is expected to be in improved March, April and May.