“If you want to get the best deal—and avoid a bidding war—your odds are best when the weather turns colder and the days grow short.”
Lawrence Yun, chief economist for the National Association of Realtors, said this regarding the affordability of the winter housing market—and we tend to agree. While the spring market will most definitely be a busy time for homebuyers, there are some key benefits to buying a house this winter versus waiting for the warmer weather to arrive.
Without further ado, let’s get to it.
There’s less competition.
During the spring and summer of 2017, houses flew off the market—at a record pace, actually. It resulted in what CNBC reported as “the fastest average sales pace since Redfin (a real estate company) began tracking in 2010. The typical home went under contract in just 49 days, down from 60 days a year ago.”
Competition was steep.
But once winter rears its head, most buyers retreat until the temperature—and the market—heat up again. This is where you have an advantage, because the supply of homes typically exceeds the demand for them. Fewer prospects interested in the same home means less bidding wars and a greater chance of making your offer stand out.
Think about it: In the heat of the housing market, you run the risk of blending in with many other homebuyers. But with thin competition, chances are you’re going to look special when you walk in to tour a home.
Sellers could be motivated to close.
You might be asking, “Since there’s less competition, won’t there be less homes to choose from?”
And while that may be true, if you do find the right home, you might already be in the driver’s seat. Consider these scenarios:
- The home’s been on the market since last spring. For whatever reason, the home didn’t sell during the peak season and now the seller is eager to get the deal closed. In this case, not only could you negotiate a lower-than-average offer, you might be able to talk down closing costs, negotiate the closing date, or even convince the seller to include household appliances.
- The owner NEEDS to move by a certain date. Since this time of year isn’t sizzling for sellers, unique circumstances may be dictating the winter move. Reasons like a job offer, a marriage, a birth, and more could put the seller into “hurry up” mode. This is good news for you.
- The owner is in need of cash. It’s possible the homeowner wants their hands on the home sale proceeds as soon as possible and doesn’t want to wait until the warmer months.
It’s no surprise why most homes get listed in the spring and summer—more buyers, better weather to showcase the house, etc. So, whatever the reason the seller has it listed in the winter instead will likely work to your advantage.
Mortgage rates are poised to rise soon.
In December of 2017, the Federal Reserve raised its benchmark interest rate by a quarter percentage point. And by the sound of it, rates will continue to rise this year. “Policymakers plan to raise rates three times more in 2018, and then twice in 2019,” according to CNNMoney.
Currently, mortgage rates are still incredibly low in the historical context. But for how long? We can’t be sure, but with the possibility of three rate hikes in this year alone, buying sooner rather than later could be the smarter financial move for you.
You’ll see firsthand how the home holds up in the winter.
Depending on what part of country you’re looking to buy, snowfall and low temperatures might be common this time of year. If this is the case for you, you’ll gain some useful information. You can directly evaluate things like the home’s insulation, heating system, roof, and gutters when you tour the home. These things are expensive to replace, so if you notice a cool draft or an ice dam on the roof, factor it into your decision.
Simply put, buying a house in the winter allows you to assess things like this that you otherwise wouldn’t in the spring or summer.
Have you warmed up to the idea of braving the cold and taking on the winter market? You just might find the perfect home—at a fraction of the hassle.
Of course, it’s not just about finding the best home. It’s about finding the right home loan, too. According to our own mortgage expert, these 10 questions will lead you to the right lender and loan for you.