Don’t let the winter homebuying season get you down
Fall is here, but winter is coming. The winter months are typically the slowest in the real estate industry. This is because buying or selling a home around the holidays or when it’s cold and wet outside isn’t appealing. But you have to look on the bright side: While many real estate professionals fear the winter slowdown, it’s actually a good time for buyers looking for a deal.
When it comes to buying a home, one of the largest purchases most people make in their lifetimes, timing is everything. The housing market fluctuates greatly depending on the seasons. A new study says wintertime is generally the best time to buy.
The findings from NerdWallet used two years of real estate listing and sales data from the 50 most popular metro areas.
As a real estate agent representing buyers, it’s important to know how the seasonal shifts can and will impact your clients homebuying potential.
Be a real estate hero during the winter months
Now’s your chance to find your client a great deal that offers the most bang for their buck. While it is true that home sale inventories drop dramatically in the winter months, sellers who do list their homes are typically more motivated to move.
Jonathan Smoke, chief economist for realtor.com, says shopping for a home in the off-season gives buyers better leverage, including contingencies.
“Winter is a buyer’s market. With less competition and fewer dedicated house-hunters, the colder months present an opportunity to snag a good deal,” says Anisha Sekar, Financial Advisor for NerdWallet. “Not only are asking prices typically lower, but you’ll face fewer buyers offering competing bids.”
Based on inventory from January 2012 to August 2016, time on the market is highest in January and February, at an average 107 and 104 days, respectively. Meanwhile, the median home for sale in May and June remains active for just 73.2 days, NerdWallet says.
In 48 states, January and February exhibited the lowest prices compared to the rest of the calendar year. On average, homes cost 8.45 percent less in the two months following the holidays compared to summertime.
Buyers have more negotiating power in the winter
People prefer to move in the summer: Schools out, the days are longer and warmer. And while inventory is typically higher, so is the competition, which can push up prices.
In the winter months, sellers are more like to negotiate on price and contingencies.
“Even a small difference in price can mean significant savings in the long run,” adds Sekar. “For example, let’s say you’re buying a house with 6 percent closing cost and a 30-year mortgage with a 3.25 percent interest rate. If your house costs $500,000 as opposed to $550,000, the total cost of your mortgage will fall by over $80,000. You’ll feel the benefits of buying low for decades to come.”
With winter quickly approaching, now is the time to act. The mortgage originators at Essex Mortgage (NMLS: #70377) are here to help. Give us a call today at (888) 892-4070.