The real estate boom has altered the established seasonality of the real estate market.

In a normal year, the real estate markets die down during what we call the “dog days of summer.”  The issue is, we have not had anything akin to a normal year in quite a few years. Low interest rates, the pandemic and the ensuing real estate boom eliminated seasonality from the equation. So, as the real estate market has slowed down this summer, an interesting question has arisen.

That question is—how much of the slowdown we are witnessing is caused by decreasing affordability and how much is caused by seasonal factors?  We can say that higher home prices, in conjunction with higher interest rates, definitely have had a dampening effect upon the markets. But we cannot put a finger on the effect of the typical summer slowdown.  Certainly, as the pandemic has worn on—so many more have taken advantage of their new-found freedom to get the “Heck out of Dodge.”

We will only know if seasonality is a factor when September comes, and the kids go back to school. Interest rates have also come down a bit from their highs and the market slowdown has eased the hot levels of appreciation.  Thus, while affordability will not be as it was during the height of the pandemic, it could get marginally better.  Only time will tell, as we have just about another month of the dog days. Meanwhile, the job market is not taking any time off this summer with over 500,000 jobs added last month.