Buying a house is a big commitment. It is often the most significant investment people make in their lifetime. Potential homebuyers spend years preparing for this moment, saving for a down payment, ensuring a healthy credit score, shopping for a lender, and weighing mortgage options. Now, with a real estate agent by their side, they are ready to begin shopping for properties.
Does it matter what time of year buyers begin searching for their dream home? The answer isn’t as black or white as you may think. Before jumping in, it’s essential to understand that while seasonality affects home prices, inventory and competition, you should base your search and timing on current market conditions, credit health, and personal life circumstances. All that being said, let’s look at how seasonality might affect home buying.
Purchasing a home during winter
Typically, winter presents lower inventory and potentially lower home prices; As a result, real estate agents often recommend selling homes during spring. It’s likely that if sellers list their homes during the winter, it means they need to sell now. This added pressure to sell their house could make negotiating prices or other concessions easier. That’s not to say that you can come in way under asking or lowball them, but you probably have more leverage because the seller may not have many offers.
Winter isn’t historically a competitive time to look for a home. As a result, you will likely have less competition than during summer or spring. The pressure to move quickly to view an open house the moment they come up is much less intense. Because there are fewer buyers in winter, your real estate agent may not be as busy with another buyer rushing to take the plunge into homeownership. Your real estate may have more personalized one-on-one time and advice for you.
On the flip side, buyers should also consider, depending on where they are buying, that moving in winter could present challenges if the weather is inclement. If they live in a state with cold winters, moving while it’s freezing outside or even snowing could be extremely difficult. One of the most challenging aspects of buying a home during the winter is an area with harsh winters. For example, it could prove challenging to complete a home inspection and determine the condition of the roof if the home is covered in snow.
Purchasing a home during spring
Coming on the heels of winter is spring, a competitive time of year for real estate. Property listings tend to pop up rapidly, which means tons of inventory for buyers to choose from. Perhaps sellers like to list in spring because it often offers warmer weather, showcases blooming flowers, and gives sellers the opportunity to show their home without all that snow! Then again, because many associate the spring housing market with bidding wars and heavy buyer competition, more sellers may choose to list their homes than take advantage of the opportunity.
On the flip side, as the buyer, having a more extensive inventory to choose from also comes with competing with more buyers. A lot more. Think of bidding wars and higher prices. Given the competitive nature of the spring housing market, buyers may also have less negotiating power when they’re putting offers on houses with multiple offers.
Purchasing a home during the summer
Like spring, summer is still a hot buying season in real estate. The favorable weather is conducive to visiting houses, allowing sellers to show a home’s curb appeal. Additionally, all those spring listings still on the market bleed into summer, so inventory remains high.
Competition amongst buyers typically remains heavy during the summer months. However, the end of summer may bring a drop in prices, as sellers who listed in spring may become increasingly motivated to sell the longer their home sits on the market.
Purchasing a home during the fall
Buying a house during fall could be appealing to cash-strapped buyers. Similar to winter, sellers are often motivated to sell, giving you some negotiating power. Additionally, depending on where the house is located, most sellers will want to avoid having to move in winter, and from that “need for speed,” buyers may see more favorable pricing.
Real estate agents might also be available to give buyers a more personalized service or advice since they may not be quite as busy as they were in spring and summer. The same can be said for lenders, title insurance companies, and others involved in the transaction.
Ultimately, seasonality has a significant impact on the price of listed homes, as well as inventory. Just don’t forget that other factors must be weighed before determining when it is the best to buy. Current market conditions, interest rates, and, perhaps most importantly, personal circumstances, credit health, and savings should all be factored into when deciding to begin the home-buying process.