It’s counter-intuitive, to be sure, but December can be an excellent time to find a home to buy, particularly for buyers who are sick of losing out to others in the busier homebuying months.
Winter is the doldrums for home-shopping, no question about it. Most home sales take place in June, July and August. Some of this is thanks to tradition and the distractions of the winter holidays. Another important factor is school schedules: Families typically prefer to make a household move during the summer vacation months, so children can start at a new school at the beginning of the school year.
If summer is the peak, winter is the bottom of the yearly real-estate market. It is unquestionably less pleasant to shop for homes when the weather’s bad, roads are treacherous and darkness prevails.
More value for the money
But if you are savvy and willing to brave the elements, shopping in the low season might just get you into a home, and for less money than you’d spend in May. One powerful reason for shopping now is value. The chances are excellent you’ll be able to buy at a discount compared with prices in the peak home-shopping months.
A home’s selling price typically varies throughout the course of the year by 5 to 7 percent, on average, says Atlantic Magazine. These fluctuations, “as erratic as they seem, actually occur very predictably: The cost of a home is higher in the summer than in the winter,” Atlantic says.
December or October?
RealtyTrac, a publisher of real-estate data, combed through its records and found that the best bargains are to be found in October, specifically, Oct. 8. Looking at 15 years of numbers and 2.7 million October sales, RealtyTrac analysts found that the average sale price then was 2.6 percent below average, that’s a savings of $10,400 on a $400,000 home.
But not everyone agrees that October is best. Some even say Christmas Day as the best day to seal a good deal on a real-estate purchase. Here’s the thinking: Everyone, sellers included, is likely to be in a jollier, more-generous mood.
Here are five good reasons why December can be a magic month for bargain-hunting home-shoppers:
1. Limited competition
In December, there’s no competition to speak of. Other (saner?) buyers are at home, gathered around the Christmas tree, opening gifts and preparing a big dinner. One worry: You may have trouble finding an agent who’ll write up your offer.
2. Tax benefits
Looking for some end-of-year tax deductions? If you close your home purchase before the end of the year, you can deduct the mortgage interest you paid, your loan points and your property taxes from your 2015 tax return.
3. Desperate sellers
With the holidays looming and a new tax year nearly upon them, sellers who put their homes on the market in December may be especially motivated to close the deal and start the new year fresh. If you’re a buyer, that can put money in your pocket.
“A seller who’s looking to move a piece of real estate during the holidays is a seller who needs to sell, because nobody in their right mind would pick that as the most convenient time to list their property,” said Tim Deihl, associate broker at Gibson Sotheby’s International Realty in Boston, talking with Bankrate.
4. You get a realistic look at properties
Winter home-shopping allows a chance to see real-estate properties in a clearer light. With flowers gone and curb appeal at a minimum, shoppers can more easily focus on the permanent features of the home.
As you tour a property, pay attention to how well the home is insulated, if you feel cold drafts, whether the window seals seem tight and how well the furnace is working. Your inspector will get a good look at the home while it is under the stress of lower temperatures, winds, snow and rain.
5. Rates still are low
Incredibly, and defying experts’ predictions a year ago, mortgage rates continue to stay in the basement — fantastic news for buyers.
The interest rate on the average 30-year mortgage purchased in the week of Nov. 5, for example, was just 3.87 percent, down from summer, when it jumped briefly above 4 percent. But let’s not quibble. Four percent is also a very low rate for U.S. homebuyers, in historical terms.
The downside: selection
The bummer about winter house hunting is that, even if you are not the type of shopper who needs to try on 20 pairs of shoes before making a purchase, you probably will be frustrated by the thin selection of properties on the market.
The odds aren’t great that you’ll find the home you envisioned. But house-hunting is like that, anyway, to a great extent. Unless you’re building a custom home or buying a new home from a builder who offers you the chance to make pre-construction choices, you’ll always face compromises.
On the other hand, you can look at winter home-hunting as a treasure hunt. For many reasons, including family deaths, financial pressure, logistics and job relocations, sellers of some very lovely homes find themselves forced to list a home in December. Wouldn’t it be great if you were the buyer who pounced on such a prize, at a discount, no less, while everyone else was gathered at home around the Christmas tree?
What’s your experience with real estate shopping in different seasons? Share with us in comments below or on our Facebook page.