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The holiday season has traditionally been the best time to do a home deal because people are often too busy with crowded calendars (stretching from Thanksgiving through New Years) to worry about selling. your house or buy one.
The advantage for buyers is that there is less competition and home sellers are often more motivated to dispose of their real estate (hint: prices may drop) during the holidays.
However, some experts say there will likely be more home buying activity this winter than in previous years. With existing home sales continuing to rise for five months in October, outpacing October 2019 by 26.6%, the vacation real estate market could be hot enough to melt the annual real estate freeze.
“The rapid rise in house prices shows a real estate market that is on fire and shows no signs of abating,” says Ali Wolf, chief economist at Zonda, a real estate market research and real estate research firm. “Potential home buyers are often distracted in the winter by travel and vacations, but this year is different. There is a direct correlation between people who spend more time at home and a strong demand for housing. “
The best days to buy a house
In an analysis of home sales between 2013 and 2019, ATTOM Data Solutions found that December is when buyers typically get the best real estate prices.
The amount buyers spend on a home’s value, according to the report, averages 2% in November, 1.5% in December, 2.5% in January and 3.4% in February.
And one of the two best days to buy a home is right between Thanksgiving and Christmas: December 4. The second best day comes a few weeks after the New Year, on January 26. These buyers will pay the market value, rather than paying a premium above the value, which is common in a seller’s market.
These dates may change depending on where you live. For example, Ohio and Tennessee had the largest discounts on total market value (-7.4% and -6.2%, respectively) in January; The Michigan (-7.2%) and Delaware (-6.3%) discounts didn’t come until February.
The 2020 housing market is different from historical patterns in so many ways that relying on history to gauge the future is like relying on an Ikea chair that your toddler put together. There is a possibility that it works like a chair, but it is thin. What we do know is that buyer demand continues to rise and mortgage rates continue to fall – two signs pointing to a warmer than usual market this holiday season.
“Several major forces continue to work on behalf of the housing market,” says Todd Teta, director of products and technology for ATTOM Data Solutions. “They include rock-bottom interest rates, unemployment patterns that have done less harm to middle- and upper-income people with the resources to buy homes, and near-record stock values that give many home seekers the financial means to make down payments on the purchase of houses “.
However, all of this could change if Covid wreaks more havoc on the economy without an aid package to save the day. At any moment, an unknown number of home seekers could reconsider whether they want to buy amid so much uncertainty, Teta warns.
The worst days to buy a house
The housing market typically picks up around spring and creeps into the summer. Children do not go to school and people have time to compare prices. Many families try to buy a house between May and August.
All of this translates to a large number of buyers competing for the same homes, driving up prices and leading to more expensive real estate.
The worst day to buy houses, according to ATTOM Data Solutions analysis, is June 17, when buyers pay an average of 9.2% on the value of the house.
With more students doing remote learning, it’s hard to predict what buying patterns will look like next summer. It is reasonable to expect uncertainty around school and work until there is an approved vaccine and the country can begin to open its doors without the threat of infection.
Although school districts may not be the primary motivator for some buyers, home classrooms and home offices are certainly becoming a priority.
“The increasing cases of Covid-19 make ‘home’ more important than ever. We saw that as people spent more time at home from spring to fall, they decided it was time to improve their living situation, ”says Wolf. “The nesting trend is expected to repeat itself in the coming months.”
What Home Buyers Should Do to Get the Best Price
Although Covid has changed school and work situations, and even reshaped how the holidays will look this year, cost-conscious home buyers should be on the lookout for real estate deals this winter.
When the president declared a national emergency on March 13, most open houses were canceled and many sellers took their homes off the market because buyers were concerned about visiting homes and even going to offices to sign mortgage documents.
With more information, online lending tools, video home tours, and protective gear available, the housing market is not expected to stop during this new wave of Covid cases.
And while the holidays may not be as busy (less travel, fewer meetings), experts still expect some degree of real estate slowdown as winter approaches. The downside is that there will be even fewer homes to choose from in an already low-supply environment; The good news is, there may be fewer buyers waving bigger checks too.
First, find a real estate agent who knows the area well, understands your goals, and is willing to work through the busy Christmas season. This is the key. If they get distracted by the holidays, then you are at a disadvantage. You want to find someone who is hunting a house with you, regardless of the date.
Next, put your paperwork in order. This includes having a mortgage pre-approval letter ready and your down payment lined up so you can act quickly if a home shows up in your pricing window.
Finally, get ready for a sudden open house or private tour opportunity. Don’t put off displaying a new ad, otherwise someone else might pick it up. If it hasn’t been listed and you get a chance to see it, this could be a golden opportunity to bid before anyone else sees it.