Whether you’re ready to buy today or are gearing up for the year ahead, here’s why any day can be a good day to begin your home search.
You might think that there are inherently optimal times of year to buy a home, especially if you’ve noticed “For Sale” signs flooding your neighborhood during specific months. In reality, however, there are a number of variables that make up real estate market cycles, so the right time is more about your personal preferences than any hard-and-fast rules. We explore what the real estate sales year tends to look like under normal circumstances—and how it may change under the “New Normal” market.
The Traditional Real Estate Sales Cycle
For most buyers and sellers, the spring market is the most active part of the real estate year. Buyers have often spent the winter poring over market statistics and excitedly planning for their home purchase—perhaps their ultimate New Year’s resolution—and, in colder regions, are keen to get out and look at properties as the weather becomes more temperate. As the sun emerges and flowers begin to bloom, sellers can showcase their home at its best while getting ready to move by the end of the school year. For both parties, the spring market offers the opportunity to make a move in good weather and be settled in a new place by the time school begins again in the fall.
Of course, people sell their homes at all times of the year and for all types of reasons:
- Relocation for a job change or for other personal or professional motives.
- Marriage or domestic partnership, where one or both partners are selling their home and moving into a home together.
- Divorce, in which separating spouses are dividing up their assets and selling the family home.
- Eldercare needs, when an elderly individual might downsize or move into a long-term care facility.
- Probate, where an inherited property is being sold in order to divide an estate among the heirs.
- Distressed sellers who are no longer able to afford their home and are highly motivated to sell rather than enter into foreclosure.
- Investment portfolio liquidation, whereby an investor or investment company is liquidating or reconfiguring a group of investment assets.
Whatever the reason for the home sale, the fact remains that people sell homes year-round. That means that, as a buyer, there’s no need for you to limit yourself to a home purchase during the spring market.
Benefits to Buying at Off-Peak Times
As a matter of fact, you may find that buying your home at an off-peak time makes better financial sense and offers you options you won’t find during the spring market. Here are just a few of the advantages you may experience when you purchase a home during the other nine months of the year.
Less competition Of course, the biggest advantage you’ll enjoy when you purchase a home outside of the spring market is the lack of competition. This can be a major boon compared with low-inventory markets where multiple offers and above-asking-price contracts are common. In addition, the slower pace of the off-peak months may allow you to take your time and make a more confident, educated purchase, (rather than feel rushed into something you’re unsure of).
More negotiating room With less competition, you may find that you are able to negotiate more aggressively than you would be able to in a high-demand market. Work with your trusted real estate professional, look at the comparable properties in the area and determine whether there is some wiggle room in your offer that could save you thousands of dollars on your home purchase. Additionally, you may find that sellers are more willing to cover some of your closing costs during an off-peak market.
More motivated sellers A seller who puts his or her home on the market during the holidays, in the middle of winter, or right at the beginning of the school year probably has an important reason for doing so. Maybe they need to cash out their equity because of an unexpected job loss. Perhaps they are planning to get married and don’t want to carry two mortgages, or they may have received an employment offer that requires them to relocate quickly. Whatever the reason, these sellers will generally be more motivated to negotiate price and terms than sellers you’ll find in the high-volume spring market.
“Leftover” properties One of the best times to find a bargain home is on the cusp of a hot market. You may want to shop homes with high days on market (DOM) in the autumn. These homes that have been sitting for a while may have owners who are starting to believe that the right buyer will never come along, making them highly motivated to cut a deal before a new spring market rolls around.
Off-market properties Your real estate agent or broker may be helpful when it comes to sourcing properties with expired listings or that have not yet gone on the market. In such instances, frustrated sellers may have delisted their home prior to the holiday season; perhaps they are ready to sell but are waiting for the spring market to roll back around. It certainly doesn’t hurt to ask your real estate professional if they can tap into his or her network to check out expired listings and find motivated sellers that other buyers don’t even know about yet!
COVID-related Changes to the 2021 Sales Year
As with so many other things, COVID-19 has upended the real estate industry and made for a slightly topsy-turvy market this past year or so. Frustrated buyers and sellers who were planning to shop the 2020 spring real estate market found themselves locked down instead, resulting in a great deal of pent-up demand. This, along with the ongoing low interest rates in the mortgage industry, may result in an unprecedented hot market that lasts throughout the fall and winter of 2021.
Whatever your home purchase goals, Simplist offers the financial tools you need to make them a reality. With thousands of mortgage products from expert lenders, there has never been a better time to crunch the numbers and begin your “new home” journey.