Real estate prices and inventory rise and fall with the seasons. If you’ve decided to buy a house rather than build one, you’ll want to strategically time your purchase to avoid the seasonal flood of homebuyers who could price you out of your dream home with a bidding war.
We talked with a group of real estate experts about the best times of year to purchase a home. Here’s what we found out.
ON THE WEST COAST AND IN SOUTHERN STATES
Just like in the Midwest and East Coast, the winter months are a great time to buy a house on the West Coast and in the South.
“After being in the business for 14 years, I have come to the conclusion that the fall and winter time is the best time to purchase a home,” said Tracey Hampson, a realtor in Santa Clarita, Calif. She added that, “We still have sunny days through the fall and winter time so it’s easy to view homes. There is also no battling the cold weather while looking for a home.”
While housing inventory usually drops significantly in the Midwest and East Coast during the winter, it can stay fairly high in these parts of the country.
“There isn’t as much inventory as the spring and summer, but there’s enough that the homebuyer has a choice,” said Hampson. “With the lower, but still healthy inventory, buyers do get a better list price on homes because sellers realize there aren’t as many buyers this time of year.”
Even though the dip in inventory is slight, it’s still enough to motivate sellers to flex on their prices. “They take every offer more seriously and are far more willing to negotiate,” said Hampson. “So, during the fall and winter time, you have buyers and sellers who are more serious and focused regarding the home-buying and selling process.”
THE BEST OVERALL TIME TO BUY
The quietest time of year in the real estate market is mid-fall through mid-winter. The four slowest months of the year in real estate are November through February, accounting for 27 percent of home purchases in the average year, reported HousingWire.com. The four busiest months of the year – May through August – account for 40 percent of annual home sales.
Some real estate agents argue it’s better to buy a new home in the spring and summer when inventory is high, but there are benefits to waiting until the market dies down.
“Inventory may lower, but there are so many fewer people house shopping that buyers can negotiate lower prices,” said Brian Davis of Spark Rental. “In other words, even though supply drops in the fall and winter months, demand drops even more.”
According to Davis, summer tends to be a more popular time to buy. Families prefer to move when kids are out of school, but you might end up paying a higher price for making things logistically easier.
“It should be no surprise that no one wants to buy a new home during the holidays,” said Davis. “Most people instinctively start nesting as the weather cools and turn inward to hunker down with their families. Parents focus on holiday shopping and plans, and prepare for winter ‘hibernation.'”
This is the perfect time for buyers to strike, said Davis. “Sellers often want to close the old chapter of their lives before the year ends, both for tax and psychological reasons. Sellers are generally more amenable to lowball offers if buyers can settle quickly before the end of the year.”
Not only can you negotiate a lower price on your next home, but Davis says you can find other savings, too.
“Service personnel are also more eager in the leaner winter months. Realtors and mortgage brokers are paid on commission, so they will bend further to make each deal happen during their slow season,” he said. “They’ll also have more time to focus on each deal.”