Winter may not seem like the ideal time to buy a home. It’s colder, darker and wetter, be it rain or snow, and it may not feel like the ideal environment to visit open houses. Families often prefer to make moves during the summer to avoid disruptions during the school year. If you’re willing to go against the grain, winter has several advantages over the rest of the year that may make it among the best times to buy a house.
Typically, sellers consider winter a less desirable time to put their homes on the market because there aren’t as many buyers as compared to the peak (and super competitive) summer months. They expect they’ll wait longer to sell their home and may get fewer offers in the process, which gives the edge to buyers. Some of the reasons why the season may be the best to buy a home include:
- Less competition and lower prices
- Room to negotiate during the purchase
- Potential savings on closing costs and agent commissions
- Quicker closing time because lenders and Real Estate agents are more readily available
Less Competition
When the cooler weather settles in from October through February, there are less people looking to buy or sell a home. This clears the way for serious buyers to focus in on a purchase with less worry that their offer may be outbid by an all-cash or over-asking price offer. Since sellers are motivated to close a deal, they may also be more likely to stick with a traditionally financed offer.
Home Prices Drop
Home prices tend to drop at year’s end. In December 2020, prices decreased 31.81% from their summer peak while in December 2021, home prices dropped by 34.46%, according to fitsmallbusiness.com. In contrast, the warmer seasons have more people shopping for homes, which drives up prices and makes it an extremely competitive market. Data shows listing prices from April to August tend to be higher than the rest of the year.
Longer Time to Sell
Between October and February, homes stay on the market longer than in the spring and summer months. Homes for sale in the Fall and Winter average 61-71 days on the market compared to 34-36 days during the spring and summer. The longer a home has been on the market, the greater the opportunity to negotiate. Sellers may be willing to negotiate on price, closing date, and other terms to get the deal done.
Save on Closing and Commission
You could also save on closing costs and Real Estate agent commissions when you buy a home off-season. According to Bankrate.com, homebuyers in October paid the lowest above market premiums on home purchases at 2.9%. It was followed by December at 3.4% and by November and January, both at 3.9%. Buyers who closed in May paid an average 11.5% premium.
Also, because the winter months are slower, lenders and agents may have more time to spend with you on questions, loan options, preparing counter-offers, and ensuring your loan closes quickly. According to Realtor.com, home transactions during this time close quicker because the market slows significantly, by 25%-30%, than in the peak season. This is particularly important if you’re buying your first home and are counting on your agent to guide you throughout the process.
Travis Can Help
If you’re looking to buy a home this season, or at any time of the year, Travis Credit Union can help. Our knowledgeable mortgage loan experts will work with you to find the right TCU mortgage to fit your unique financial situation. Visit our Mortgage Hub today!