Published on: Jan 11, 2017 16:20:01
Deciding to buy a home often comes with caveats - the location, availability, job requirements, and commute may come far ahead of scheduling a move to a new location. However, many people seek to buy homes at the beginning of the summer - when kids are finished with school and time permits a move and a settling period before classes resume.
Although not all home buyers have families and school aged children, this trend is big enough that it affects the whole country. You'll have a harder time finding real estate in Dallas, Texas, for example, in the early summer than you will in the late fall. You'll also pay more in the summer when homebuying is more competitive, and (although listings may not change) offers for less are more likely to be considered as the weather turns colder and the interest in moving dies down.
In fact, the dead of winter, (January or February) can be the absolute best time to buy a home according to recent data from NerdWallet. Their research looked at all 50 states, and showed that:
- Summer prices are highest. June and July will see home prices peak, and you'll also face stiff competition for the nicest homes with the most value in the best neighborhoods - especially when it comes to desirable job markets and school zones such as real estate in Atlanta, Georgia.
- Autumn prices are better. Home listing prices will start to slide gradually once summer ends, but the real story can be found in the final sale prices, which drop off sharply once September rolls around.
- Winter prices are best. If you can wait until January or February to buy a home, you can expect to pay almost 10% less for your new home. This is especially true in Northern states, and slightly less true for Southern markets, such as, say, Florida real estate.
The majority of sellers will put their homes on the market starting in the spring and peaking in summer, but by Labor Day the number of homes will drop as competition for houses in the most desirable markets starts to wane. Inventory starts staying on the market longer and longer, with homes in areas that typically see a turnaround of 2.5 months stretching out to 3.5 months or longer to be sold.
This provides incentive for sellers to unload properties and gives buyers leverage to negotiate price and closings. Sellers have an increased sense of urgency and buyers can remind them that they can always wait until summer when more houses are on the market. Nine times out of ten, a lower offer will be accepted in the winter.
Homes are advertised at a listing price, but buyers rarely actually pay those prices in most markets even in summer - however, the gap between list and sale price is typically narrow in the warm months and widens considerably as weather cools off, thanks to buyers’ greater negotiating power.
Moral of the story? Buy in the winter, sell in the summer - and don't forget to use a real estate agent!
