Seasonality typically plays an enormous role in the ebb and flow of supply and demand within real estate markets. Below we look at seasonality from virtually every angle we can think of to illustrate its effects. In this report, San Francisco's market is used as the sample, but, generally speaking, seasonality plays out in a similar manner throughout most Bay Area markets.
The market begins to wake up early in the beginning of the year after the doldrums of the mid-winter holiday period - mid-November to mid-January - with the number of new listings as well as buyer demand rapidly climbing, and sometimes peaking, in spring. Summer usually brings a significant slowdown, hitting its nadir in August. In early autumn, listings start pouring on the market after Labor Day for the relatively short fall selling season through mid-November - with a concomitant jump in sales. Then before Thanksgiving, activity plunges dramatically for the mid-winter period. Many listings are pulled off the market at this time to await the beginning of the new year or the next spring market.
The luxury home market is even more fiercely seasonal than the general market, and charts illustrating that segment follow the large number of charts on the overall market. The seasonality of luxury home sales plays a significant role in median sales price changes - pushing median prices up during its active periods, spring and autumn, and letting them fall when luxury home sales decline in summer and mid-winter.
Of course, general economic conditions - booms, recessions, financial market volatility, big changes in interest rates, natural disasters, and so on - can affect, and sometimes over-shadow, typical seasonal changes.
In the Bay Area, Napa and Sonoma Counties have a somewhat different seasonal rhythm due to their large second-home markets. There, listing and sales generally climb through spring to peak in mid-late summer, and then drop through the end of the year. Their charts (not included in this report) look more like mountains, climbing up and down, while other counties usually see more variations in the ebbs and flows of activity during the year.