In the Northeast, the colder season is traditionally a time for hunkering down with a good book, bracing for bitter temperatures and trying to stick to those vexing New Year’s Resolutions. But is it the best time of year to buy a house? For house-hunters willing to brave the elements and choose from a slimmer inventory of homes, the experts say yes.
According to the national online real estate database at Zillow, the best time to sell a house is during the first two months of May. Zillow’s data reveals that homes listed during this time sell quicker and for an average of $1,600 more than any other time of year. In addition to spring bringing a rose-colored hue to real estate, families typically like to purchase closer to the summer months and avoid uprooting the kids during the school year.
As a result, the inventory of houses on the market tends to be highest during these peak late spring/early summer selling months. A seller’s market is great for those trying to unload real estate, and higher inventory certainly gives home buyers more properties to choose from, but competition from other buyers is also likely to peak during this period, driving prices higher.
Buying a house in the winter, however, puts the buyer back into the driver’s seat. Yes, there are usually a much smaller number of homes on the market, but there are also fewer buyers to compete with, and sellers might be much more motivated to get a deal done, providing buyers with critical bargaining leverage.
“Sellers are much more motivated in the winter,” says Alan Wood, a broker with RE/MAX Plus in Rochester, New York “We like to say winter sellers aren’t just in the market, they are on the market, and really want to sell, and buyers can often get a little better price because of the lack of competition.”
Of course, not everything about winter makes it the best time to buy a house. Accumulated ice and snow can make it difficult for buyers to carefully evaluate the exterior of the home and the quality or quantity of the landscaping. “From a buyers standpoint, it is difficult to evaluate a home when everything is covered in snow,” says AAA mortgage consultant Louis Alfaia. “Be sure to visit your possible new home when the roof and yard is clear to avoid any nasty surprises.”
Wood agrees and says there’s nothing wrong with asking to see summer photos of the yard or taking an extra few days for a more thorough inspection of things that are easily hidden by snow, including roof issues, grading issues, and damage to sidewalk, driveway and patio pavement.
A little extra due diligence aside, wintertime house hunters can expect a bevy of advantages over spring and summer buyers, including extended rate locks and discounts on everything from interest rates to moving company fees. “We move 80 percent more people in the summer than in the winter,” says Lior Rachmany founder and CEO of Dumbo Moving, the largest moving company in New York City. “As a result, winter moves, on average, cost 25 percent less than summer moves.”
And like purchasing a home at any time of year, patience and timing are key to finding a great deal on a house during the winter months. “Except in extreme cases, winter sellers still typically wait to negotiate until the house has been on the market for awhile. Even if winter is the best time of the year to buy a house, sellers will still usually work their offers until the 30-day mark, and then begin looking to either negotiate or revisit their listing price.”
Wintertime house-hunters are likely to be well-positioned for increased inventory to hit the market over the next two decades, too. According to Zillow, more than a quarter (27.4 percent) of the nation’s owner-occupied homes will be sold as a “Silver Tsunami” of Baby Boomers vacate their houses for retirement communities and assisted living facilities. Since this critical demographic has already raised their children, sellers won’t have to worry about matching the market to their kids’ academic calendar.
And don’t be surprised if you run into some lingering holiday spirit. According to Alfaia, sellers will often keep decorations up to give buyers a cozy, nostalgic feeling. “It can be a great time to see a house if it is decorated,” he says. “If you can tolerate the elements, and exercise some patience, winter just might be the best time to buy a house.”
Learn more about how AAA can help you with your mortgage.