I posted a market update video his week for August, and the data shows the housing market is booming. However, a question came up about prices, because there have been a large number of price reductions on listed homes recently. That conversation led me to look at the seasonality of sales prices in the Albuquerque Market and the consistent trend of sale prices pulling back slightly in the fall and winter.
The data shows that we usually see a 2-3% reduction in the price per square foot from the peak in July/August, to the low in January/February. The chart below illustrates the data and is looking at the past ten years average price per square foot for closed residential sales. The data points are 3-month rolling to filter out some of the anomalies, and it illustrates this trend.
What’s the takeaway? Home price appreciation (or depreciation) is not a straight line. We traditionally hear price change quoted as annualized data “4.9% appreciation in 2018” for example. However, the reality is that in 2018, we had a 7.3% gain in price per sqft from Jan to August and a 2.4% decrease from August to December.
So what do you do if you are buying or selling? Don’t overthink it, just be aware of the data. When it’s time make a move, do it.