“Real Estate Boom or Bust? Uncovering Seasonality’s Impact

The real estate sector has traditionally been a major driver of economic growth, playing an important role in the U.S. economy since the mid-1990s. The sector has recently been hit hard by the coronavirus-induced recession, and this has had a significant impact on the market. As cities and states around the country are seeing an increase in covid-19 cases, the real estate market has seen a noticeable drop in seasonality. Seasonality is an important concept for understanding the real estate market. It refers to the periodicity of real estate price volatility throughout the year, with higher prices traditionally being associated with the summer than with winter months. This pattern has typically been driven by the seasonal activity of buyers, sellers, corporate tenants, and renters. However, with the onset of the pandemic, this pattern is in the midst of a major shift. Seasonality is dropping a big bomb on the real estate sector. Generally, buyers tend to be more active in the summer, as they can take advantage of the higher prices available in the market. The summer months are also usually viewed as a more favorable time for apartment leases, which provide a reliable source of revenue for real estate investors. But this summer has been anything but typical, and the dip in seasonality has been pronounced. For starters, many potential buyers are now facing economic uncertainties, and this has tempered their demand for real estate. Real estate industry professionals have also noted a drop in apartment rental activity as well. And, of course, there has been an overall drop in travel related to the pandemic, which has impacted tourism and corporate tenants. The upshot is that there has been a noticeable decline in overall market activity, leading to low sales volumes and price declines. This is especially true in summer resort markets, which rely heavily on both individual buyers and corporate tenants. Many destinations have seen their peak summer prices fail to materialize, leading to significant losses in property tax revenue. The drop in seasonality has also had an interesting effect on real estate prices. Whereas prices tend to trend cautiously higher in the summer months, they are now experiencing a mid-year dip, followed by a slight recovery during the winter months. This change, however, is not likely to make up for the overall deficit in price levels. The COVID-19 pandemic has had a major impact on the real estate sector. The drop in seasonality has been a significant factor, leading to lower prices, lower sales volumes, and reduced market activity. Unfortunately, there is no simple solution to this problem. The only hope is that the rapid decline in covid-19 cases will soon lead to an increase in demand for real estate across all markets. Until that happens, however, the industry will continue to struggle. The real estate sector has traditionally been a major driver of economic growth, playing an important role in the U.S. economy since the mid-1990s. The sector has recently been hit hard by the coronavirus-induced recession, and this has had a significant impact on the market. As cities and states around the country are seeing an increase in covid-19 cases, the real estate market has seen a noticeable drop in seasonality. Seasonality is an important concept for understanding the real estate market. It refers to the periodicity of real estate price volatility throughout the year, with higher prices traditionally being associated with the summer than with winter months. This pattern has typically been driven by the seasonal activity of buyers, sellers, corporate tenants, and renters. However, with the onset of the pandemic, this pattern is in the midst of a major shift. Seasonality is dropping a big bomb on the real estate sector. Generally, buyers tend to be more active in the summer, as they can take advantage of the higher prices available in the market. The summer months are also usually viewed as a more favorable time for apartment leases, which provide a reliable source of revenue for real estate investors. But this summer has been anything but typical, and the dip in seasonality has been pronounced. For starters, many potential buyers are now facing economic uncertainties, and this has tempered their demand for real estate. Real estate industry professionals have also noted a drop in apartment rental activity as well. And, of course, there has been an overall drop in travel related to the pandemic, which has impacted tourism and corporate tenants. The upshot is that there has been a noticeable decline in overall market activity, leading to low sales volumes and price declines. This is especially true in summer resort markets, which rely heavily on both individual buyers and corporate tenants. Many destinations have seen their peak summer prices fail to materialize, leading to significant losses in property tax revenue. The drop in seasonality has also had an interesting effect on real estate prices. Whereas prices tend to trend cautiously higher in the summer months, they are now experiencing a mid-year dip, followed by a slight recovery during the winter months. This change, however, is not likely to make up for the overall deficit in price levels. The COVID-19 pandemic has had a major impact on the real estate sector. The drop in seasonality has been a significant factor, leading to lower prices, lower sales volumes, and reduced market activity. Unfortunately, there is no simple solution to this problem. The only hope is that the rapid decline in covid-19 cases will soon lead to an increase in demand for real estate across all markets. Until that happens, however, the industry will continue to struggle.