Best Time to Buy a Home Depends on Perspective
Posted By Marisa Sanfilippo on March 2, 2017 at 8:39 am
Winter, spring, summer, or fall, when is the best time to buy a home? Experts agree that statistically speaking and in terms of the widest selection, purchasing during warmer months is best. But for buyers looking to get the best bang for their buck, fall and winter often rule. At the end of the day, what it all comes down to is: the best time to buy is when it’s right for the buyer.
Time reports: Year after year, closings in January tend to show a dip in prices, suggesting that buyers who made offers in November and December got the best deals, (Lawrence Yun, chief economist for the National Association of Realtors).
For buyers who want the best discount, Time also reports: “A RealtyTrac analysis of home sales over the past 15 years pegged October as the best month to buy at a discount.” MarketWatch refers to another study, stating: “Home sale prices — the amount a buyer actually pays — in the nation’s largest metro areas typically peak during the summer, dip in the fall and are lowest in winter, potentially saving off-peak buyers thousands of dollars.”
Brian Davis, co-founder and the lead real estate and personal finance blogger at internet real-estate service SparkRental.com and also a real estate investor with 15 rental properties, gives his expert opinion: “Mid-fall through mid-winter make up the four slowest months of the year in the real estate industry, from November through February. Only 27 percent of homes sold in a given year sell in those months compared to 40 percent selling during the four busiest months (May through August),” he says.
Davis adds that while inventory may be lower than in the warmer months, demand drops even more than inventory does. As a result, buyers can typically negotiate a
better deal in the colder months. But does that mean it’s the best time to buy?
How winter factors into the best time to buy
He went onto explain that few people want to move during the holidays, and in January and February, people tend to be less active and enter a “hibernation” mode. “Uprooting and changing homes during cold harsh months simply goes against human nature and our instincts to hunker down and nest when it’s inhospitable outside.”
Owner of Happy Guy Writing Services, David Leonhardt was one of the many home buyers who bought during an “off month,” purchasing in early spring. The search was in late winter, which meant snow played a role. “That can be a challenge as far as what the foundation looks like. In our case, the house is on a bit of a hill, with the land sloping away enough that we really were not worried about that,” he says.
On the plus side, Leonhardt said he and his wife knew what they were getting as far as insulation and leaks. They were able bargain a little more because of the season, although there was not much on the market during his search so he feels that “bargain” might have been an illusion. “I think the price was already depressed when we got there in late February, thanks to winter,” he says.
What about in areas such as Southern California where the weather is always warm? Davis says that based off his experience (speaking in seasonal cities such as Palm Beach, Fla.), real estate still slows down in warm states during late fall and winter – but less so.
Ryan Hoffman’s data supports the theory: Buying when the weather is warmer is the best time to buy. As a real estate broker and owner of Leverage Real Estate in Watervliet, NY, Hoffman has access to his local MLS data in which he uses to compile spreadsheets of sales data throughout the year.
“I can see the amount of listings and sales skyrocket in the spring. I have seen the data tell me that March, April and May are the top months where the most homes hit the market, with May being the winner every year. And also, the most sales happen in June, July and August, with August being the winner every year,” he says.
As the end of the day, real estate professional Katie Messenger of the Bello Dimora Real Estate Network of Keller Williams Realty, which operates in Cincinnati, Liberty Township, Ohio, and Louisville, Ky., gives a viewpoint that the studies don’t show when it comes to the best time to buy.
“In my honest opinion, the answer is anytime is a great time to buy a home. This sounds like a cop-out, but let me explain why I answered as such,” she says. “It is never a bad time to invest in your financial future. It’s never too early in the year to start building wealth for you or your family. As long as interest rates are super low, why not take advantage of that and stop giving away your money to a landlord, which will have $0 return for you?”