When is the Best Time of Year to Purchase a House?
The real estate market fluctuates and shifts constantly. Even within a single year, a particular neighborhood or metro area can change from being a seller’s market to a buyer’s market — and back. If you knew how to time the purchase of a home, you might be able to save thousands of dollars. But can it be done?
The Best Time to Buy a House
Certain times of the year tend to be better for buyers than others. Although we’ve been in an extended period of a largely seller’s market, certain periods of time and pockets of opportunity have offered buyers an opening to land good deals.
Let’s highlight a few of them.
On or Near Christmas Day
Strange as it may sound, the week of Christmas may be the best time of year to buy a house. This could be true for a number of reasons, such as:
- Hardly anyone thinks to buy a house over the Christmas holiday, because we typically have so many other preoccupations, so there’s little competition.
- Sellers may hope to complete a transaction before the end of the year, for tax and finance purposes.
- Home prices tend to fall to a 12-month low during the month of December.
- If someone has their home listed over Christmas, they’ve got to be serious about selling.
- Sellers are much more likely to be in the holiday spirit and settle for a slightly smaller figure.
Winter is generally accepted as a pretty good time of year to purchase a house. The weather becomes crisper and people focus on other concerns.
This may remove some buyers from the market and give you the opportunity to find a deal without as much competition. “Prices may also be lower in winter,” Nationwide points out.
“In January and February, houses typically cost 8.45% less than they do in June and August, according to a study from NerdWallet. Sellers are often encouraged to wait until spring to list their homes, and those who keep their properties on the market through fall and winter may be more willing to negotiate a deal.”
But this isn’t always the case. It also depends on the particular market you shop. For example, Southwest Florida — where the weather is nearly always beautiful and warm — typically becomes a seller’s market during the winter when weather is harsher in other regions.
You might have to take various factors into account and be ready to make your move at any time. You should also be prepared to make an offer on dozens of homes on the market. Simple math says one will eventually be accepted.
When Inventory is High
Still, residential real estate is largely dependent on the simple economics of supply and demand. When demand is greater than supply, sellers have nearly all the power.
But when supply exceeds demand, buyers get the leverage. If you know which neighborhood or area of town you want to buy in, track the inventory on a daily basis.
Keep a count of how many properties are on the market and how long they sit on the market. If you’re patient enough, and willing to miss out on a few listings, you may be able to hold out until you see multiple houses for sale in the same neighborhood or even on the same street.
When so many listings are active, a little of the balance will shift in your direction. You can play sellers off one another and make them believe they have to court you.
Don’t Get Hung Up on Market Theory
It’s also worthwhile to note that although knowledge is power, too much knowledge of market theory can hold you back. You’ll discover stark differences between the theoretical economics of market movement and how the market actually responds to unique local factors in real time.
Thus, while a classic index might suggest a sudden surge or plunge, it’s sometimes the case that the expected movement ends up failing to occur (or maybe it will be drawn out over a longer period of time than you desire).
Definitely pay attention to the bigger signs and trends covered in this article, but don’t wait for the perfect storm to buy your home … because it may never happen.
Timing the market is something even the most experienced real estate professionals and investors struggle to accomplish with accuracy. When it’s all said and done, you have to trust your due diligence has been sufficient and make the offer.