FinestExpert.com Real Estate Investment Blog

The annual real estate cycle for single family homes for sale is predictable for any given area. Traditionally price increases for the year start in late January as the early-bird buyers jump-start the year, leading to a spike in closed sales in March.

Sales tend to increase from January through May, remain somewhat level until August, and then drop back down through the end of the year. A notable September down-spike opposite the March up-spike creates an interesting symmetry.

Data presented in the chart represents the median sales volume of single family detached homes in San Diego over the last 16 years. The error bars represent the typical range for the number of sales during any given month.

When you look at “sold” reports, you need to pay attention to the fact that prices are negotiated 45-60 days prior to closing (or longer with short sales). Hence, if the market is moving quickly – either up or down – then recent sold prices are a lagging indicator and need to be taken with the appropriate grain of salt.

What will happen in your area depends on your local economy and job market. In several California areas, prices for entry level homes are expected to increase 10-15 percent by June. However, interest rate increases or massive foreclosure inventory hitting the market will likely halt the increases. The termination of the first-time homebuyer tax credit will likely also halt the increases. Together, the three could well send prices heading south again.

Now is a great time to use FinestExpert.com to find some great deals in advance of coming price increases. Nearly thirty-percent of all listed properties are discounted. Pay close attention to the FinestExpert trend charts for your investment properties as local markets will vary. Astute real estate investors, stay tuned as this will likely be a volatile year with near-term bank and government decisions determining market direction.