There are many different things you’ll want to think about when deciding to buy or sell a home, and one of the most important is timing. If you are buying a home, you’ll ideally want to time the market so you can purchase your home when housing is undervalued. On the flip side, sellers will want to sell when houses are scarce and selling at a premium.
Because many people who are looking to buy a new home are also looking to sell at the same time, timing the market can be very difficult. Markets that tend to be ideal for sellers are usually not ideal for buyers, and vice versa.
Nevertheless, regardless of whether you are buying or selling, you are probably curious about how seasonal changes can potentially affect the housing market. Below, we’ll take a close look at how the onset of winter will typically affect the American housing market.
1. The Market is Generally Less Competitive
Traditionally, winter has been the least busy time of the year for realtors, both for those representing buyers and those representing sellers. People tend to avoid house hunting when it's cold, but other factors, such as increased consumer spending in December, might also keep people away from the hunt. When competition is lower, bidding wars are less likely to occur—this makes it extremely important for sellers to develop an effective pricing strategy. With fewer negotiations taking place, the first price they offer will likely represent a ceiling of what they can potentially get for their house.
2. Sellers are Motivated—That Means Faster Closing Timelines
The end of the year is when a lot of us think about whether or not we’ve accomplished our goals—and for some people, one of their most important goals for the year was to sell their house. But in addition to simply wanting to get it done, a lot of sellers will be highly motivated to get their house off the market before the end of the year. Additionally, a lot of companies will relocate their employees towards the beginning of the year, creating a further sense of urgency. When sellers need to move out quickly, they will typically be willing to throw in a few extra perks (such as fixes or changes to the home) and the time it takes to close will be less.
3. Realtors are Usually More Responsive
As suggested, the real estate market typically comes and goes in waves. During the summer, realtors will be very busy and during the winter months, these same realtors will have considerably more time on their hands. What does this mean for the average buyer or seller? Well, not only will realtors be highly motivated to find more clients, but also realtors will also be able to give each of their clients more attention. And when you have a realtor that is always willing to immediately respond to your questions, buying and selling a home can become much easier.
4. Inclement Weather can Create Complications
One variable that many people fail to consider when buying or selling a home in the winter is the weather. Winter has more extreme winter events than the other seasons, which can potentially create complications. Heavy snow might require you to cancel an open house, power outages might cause you to miss an essential inspection, and other weather events can also cause problems. While there isn’t much you can do to avoid these events altogether, you can at least have a plan in place in case one of these events eventually occurs.
5. Mortgage Rates are Relatively Stable
A lot of people assume that because the real estate market experiences strong seasonal changes, mortgage rates will also experience similarly high levels of fluctuation. However, contrary to this common assumption, there is not a statistically significant correlation between mortgage rates and seasons. This means you should not base your decision to buy or sell a home solely on what season it happens to be.
6. Lots of Discounts for Certain Services
The process of buying or selling a home can be extensive and there will be a lot of different people involved along the way. In addition to working with a realtor, you’ll also probably need to work with an inspector, a lawn care service provider, staging services, interior decorators, a handyman, and more. Most of these people, like realtors, experience a dip in business during the long winter months. Getting a discount for select services is probably much easier than you’d initially assume.
When deciding whether you should buy a home or sell your home (or both) during the winter will require you to consider many different variables. While the real estate market is, in fact, slower during these months, that doesn’t mean it’s non-existent. However, when you are making your final decision, be sure to keep these regular trends in mind.
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