Holiday Season is a good time to buy or sell a home

As winter’s end approaches, the housing market wakes up. All key measures of housing activity–searches, prices, starts, sales, and inventories–typically hit their annual lows in December or January. Each year, would-be buyers come out of hibernation first: search behavior starts to pick up in January, reaching its peak in March and remaining strong through August. Sales and inventories peak later in the year.

But local housing markets have their own rhythms. To see when each state’s housing market heats up, we looked at six years of search history – January 2007 to December 2012 – for properties in every state. Of course, Beach Luxury Real Estate has grown dramatically over these years, so we used a seasonal adjustment model to strip out the upward trend and uncover the regular seasonal rhythms of search behavior across the country.

Nationally, the peak months of search activity are March and April. After a slight dip in May, there’s a second peak in the summer months of June and July. As the year ends, search activity drops off. December is the slowest month, followed by November. At the state level, though, the peak month for search activity ranges from as early as January to as late as August. This month, February, is the top month for search traffic in Florida. In these warm states, winter weather is good for home searches and going to open houses. Across much of the country, though, home search activity peaks in the springtime, including in the Midwest, the Plains, and much of the West and Northeast. The summertime – June through August – is the peak for most of the South and a few states in the Northwest and northern New England. No state enjoys peak season in September, October, November, or December.

Even though the two earliest states to peak each year–Florida and Hawaii–are warm, southerly states, and the last two states are northerly Montana and Oregon, home searches generally peak later in the South than in the Northeast, Midwest, and Plains.

So here are some reasons why the Holiday Season is a Good Time to BUY or SELL A Home:

Reason #1: Lower competition means lower prices

Most people think of spring and summer as the best time to buy a house. They want to get their children settled into new schools before the start of the new school year. The warmer time of year therefore creates a seller's market, where buyers have a disadvantage. You'll find competition for the best deals and high prices.

For many people, the holiday season is the time to catch up on gift sales, festivities, and spending moments with loved ones. When you buy a house at this time, you take advantage of the low prices this natural lull in the marketing cycle creates. Like the diligent squirrel in the story, you will be one of the special few spending their time looking at houses.

Reason #2: serious sellers

Less competition means that people are motivated to sell their house. In the holiday season, buyers are a precious commodity. In fact, only 8.1 percent of home sales occur in December. Sellers know that fewer feet will be treading on their carpet, so this small window of opportunity turns you into a serious buyer with a serious edge. If the house has been listed for many weeks, you'll have even more negotiation power, especially since sellers receive a tax deduction if they sell before the end of the year. If you are genuinely earnest about wanting to buy a house and have a reasonable offer, why should a homeowner have to reschedule his holiday plans to continue showing his house and worry about selling? Here you have the leverage in price negotiation.

Reason #3: Better interest rates on mortgages

The drop in demand to buy a home at holiday season means that lenders experience less requests for mortgage money at this time. This phenomenon manifests itself in favorable mortgage terms for you -- a great reason why it's the best time to buy a house. Interest rates drop every December through January on a cyclical basis.

A lender can offer you a low interest rate or even cancel some fees to secure your patronage. Do your homework and shop around (don't forget to include the many online options) in order to get the best rate.

Loan officers advise that it's best to get prequalified with a mortgage broker or lender early because loan closing turnaround times can range from 30 to 60 days.

Reason #4: Tax deduction

Buying a house and closing before the end of the year may give you a much-appreciated tax deduction. You have a good chance to be able to subtract the interest component of the initial mortgage payment from that year's taxable income. Speak to a qualified tax advisor to find out how mortgage interest deduction may be applicable to your circumstances.

Reason #5: Faster closings

Faster closings are historically more available in November and December, because of fewer overall transactions in the industry. Because lenders want to close their books at the end of the year, they may be inspired to close a transaction more quickly for people buying homes at this time.

Reason #6: Enjoy your summer vacation

Finally, do you really want to spend your summer vacation overwhelmed with the demands of buying a house? If you're moved in during the winter, you're freed up to enjoy summer activities. If you do some landscaping work in the winter, you'll even enjoy the warm weather more when the fruits of your labors become a pruned and blooming property in the spring.

If you put in some planning and effort to buy a home during the winter months, then you can relax and enjoy yourself more than those caught up in the spring and summer house-buying frenzy.

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