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.
