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By Michelle Huffman
Is there a best time to buy or sell a house?
Real estate markets experience seasons of different activity levels. While the start and end date can differ depending on your market, generally spring and summer mark real estate’s official busy season (but reach out to a few local real estate agents to get a sense of when the season runs in your local community).
But what does that really mean? Essentially, this only really means is that there are more active buyers and homes listed for sale than other times of year. According to the National Association of Realtors (NAR), the busiest four months of the year are traditionally May, June, July and August and they account for up to 40% of annual home sales volume.
There’s a number of reasons for this: Homes show better with spring flowers than winter snow; the warmer, dryer weather makes home tours easier; the holidays are over; families would like to move before the beginning of the next school year.
As a buyer or seller, this increased seasonal activity can be beneficial, but depending on your needs, it can also be detrimental. So let’s break it down.
The best time to buy a home, in terms of price, is the fall and winter. NAR found that early fall can provide the best confluence of factors that benefit buyers — competition has slowed down but listings haven’t dried up and hold-out sellers are willing to reduce their prices. A statistical analysis of 23 million home and condo sales by property data provider ATTOM Data Solutions pinpointed the best time to buy from a price-point perspective was a few days in December, but October and November weren’t far behind.
Buyers tend to have more negotiating power in these seasons because demand is low, and sellers may be more eager — they may have a pressing reason to move that couldn’t wait until the spring/summer season.
However, supply is also low in the winter so finding a home may be more difficult. Some of those homes may be leftovers from the summer too, homes that have major structural problems or difficult owners that prevented a sale during the busy season.
Buying in spring or summer will mitigate these issues, but buyers may also pay a premium for a home, and they often have to be ready to move quickly — competition is fierce, so bidding wars are common in popular areas. Sellers know this too, so they are less willing to compromise on price.
The reality for many buyers is that the best time to buy a home is when you can afford it. While the rule of thumb that buyers need a 20% down payment to purchase property is outdated — few first-time buyers can afford it — and the average down payment has dropped significantly. Then there are closing fees and home maintenance costs to plan, not to mention furnishings for your new home. If you don’t have enough savings to comfortably cover those costs, then no time of year is a good time to buy a home.
The best time to sell your home is the spring and summer, specifically May and June.
There are more active buyers in the market, so you have a higher chance of selling your home at a higher price. In today’s housing market, appropriately priced homes that show well can move quickly, so the first few weeks on the market are key. Many sellers want to hit the market and sell fast to achieve the best price and avoid a prolonged period on the market, so the timing can make a difference.
That doesn’t mean you can’t sell your home in late fall or winter, but it may mean sitting on the market longer and/or not capturing the full potential price of the home. Real estate agents who know how to price and move homes during the winter months can provide you with more insight on how to position your home during this market lull — and how much it will impact your price.
Ultimately, the best time to buy or sell your home is when you’re ready. While that’s not always possible, being responsible about ensuring you have the right financial plan to buy or that your home is in the best condition to sell will benefit you the most in the long run.
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