3 Reasons to Buy a Home This Holiday Season

Well, it’s past Thanksgiving and another holiday shopping season is in full swing. I hoped you saved a bundle at the Black Friday sales because you’re going to need those extra nickels and dimes to buy your new home this winter.



Wait, what? Did I say you should try to buy a house during the holidays? I did! And you should, if you can bring yourself to focus on house-hunting rather than decorating and throwing holiday parties this year. Not only can you save a bundle, you also won’t have to fight the crowds. No one wants to move in the winter — but you’ll be richly rewarded if you do.

The Science of the Summer Real Estate Market

There are a lot of theories about why folks buy in the summer, but by and large, researchers Rachel L. Ngai and Silvana Tenreyro have the best one I’ve ever heard. They’re coming from a place of pure data, I’m coming from a place of pure practice, but their idea makes sense to me. Essentially, what this duo has concluded is that the real estate market has these predictable and seasonal swings because of families with school-age children.

Although that demographic only makes up about a third of the households looking for property, they become a sort of force of nature and, like the moon, literally control the tides of real estate, according to Ngai and Tenreyro. Their theory goes something like this: families with school-age children are resistant to moving until school is out and home sellers know it. So, sellers wait until early August to put their homes on the market, creating a huge swell of properties in the early summer.

But that’s not all. Buyers without kids also buy more readily in the summer because of the increased selection and perception that their own homes will be easier to sell in the summertime. More houses, more buyers, the cycle of life. By the end of September, though, the market burns out because all of the school-aged children are back in school. Buyers crawl back into their rentals and too-small homes and plot their next summer’s purchase.

Guys, it doesn’t have to be this way! In fact, there are plenty of houses on the market all the time! Data from the National Association of Realtors on home inventories show that year to year, there are always plenty of houses to buy, no matter the season. The average inventory for 2014, for example, was a 5.2 months’ supply. This wasn’t because the summer had 10 months of houses and the winter had just 3 months worth — the numbers were steady.

From April 2014 through November 2014, the supply was between 5.1 and 5.7 months’ worth. January 2014 through March 2014’s market had only slightly less, at 4.8 to 4.9 months’ worth — December had the lowest showing, at 4.4 months — but that’s still a lot of housing to choose from.

Now, those are national figures, so this can vary pretty dramatically locally, but the chances are good for all of you that you’ll find just as great of a house in the winter as you will in the summer months. Depending on where you live, moving may be a serious challenge in the winter time, but there’s no rush — you probably have some painting and other work you plan to do before you move anyway.

It’s Time to Buck the Trend

Buying real estate in the summer is a long-standing tradition — we all know it. But, you don’t have to follow the crowd. In fact, your Realtor will love you if you don’t. You see, for us, the summer is a long, hot blur and we really can’t give you the individual attention you need to make the biggest purchase of your life.

In the summer, a Realtor leaves home early, often before 6 am, does paperwork in the morning and shows houses from the moment they’ve swallowed their last bite of lunch until the sun goes down — around 8 or 9 pm. These days are long and exhausting and can lead to mistakes and oversights. The winter, though, is different — from mid-November until mid-January, the market is almost dead. If someone does want to go looking at houses, they get very individual treatment, each home is much more carefully considered and the whole process is much less difficult for everyone.

Buying during the holiday season can make your home purchase so much easier, but there are some other really good reasons to buy a home right now. Here are three:

Home prices are lower in the winter. Really — and I can prove that. This year, average home sales prices were highest in June, at $281,300. From there, sales prices declined to $266,000 in September and the NAR predicts that October’s numbers will come in at $263,700. But this year isn’t a fluke — this is the way it is normally.

Trading Economics has a cool tool where you can literally see the rise and fall of prices every year. If you toss out the years we were either falling into recession or recovering from it, it’s pretty clear where winter’s falling on the chart. And the pattern continues in all the years of steady economic growth, like what we’re experiencing now, back to when their data begins in 1968

You’ll have less competition. According to the NAR’s Pending Home Sales Index, December 2014 saw the least amount of homes put under contract in the last 12 months. November came in second, and January 2015 third. From experience, I can tell you this is basically the way it works — there are fewer buyers out there to buy (remember that we still have more or less the same amount of inventory), so fewer houses go under contract and so forth.

This is great for you as a buyer. You’re basically all alone on a field by yourself (unless you pick a rare gem that investors might have their eye on or you simply get unlucky and want to buy the most popular house on Earth). When you’re alone, you can take your time in making an offer, you can offer less than the house is listed for and you don’t have to worry too much that someone else is going to make an above full price offer and ruin your bubbling dream of a life on your own slice of real estate.

Bonus equity come springtime. I’m not promising that you’re going to have a boost of equity in the spring, but I’m going to say that the way the market has been moving, it’s a good possibility. I’ll also say this: if the holiday season seems to represent the lowest value point in the year for real estate, it only follows that the hot spring and summer sales seasons would represent the highest points.

Depending on where you live, that might not be enough equity to buy a cheeseburger, but it’s something — and the only thing you did to earn it was buy a house when everybody else was celebrating the holidays. This is an obvious win-win situation. Any time you can do something you were already going to do (buy a house) and get some added value (bonus equity in a short time), you might as well, right?

The Bottom Line: Make it a Merry Christmas with a New Home

I know, I know… spending the holiday season house hunting is about the least fun thing you can probably think of. There’s no tinsel or candles or festive decorations or feasting, but all that stuff will come in time. I’ve long preached that you should never think of your home as an investment, but you still have to make that payment each and every month, so it should be going to something worth having.

Especially if you struggled to find the house you wanted for the price you could afford, you may be surprised at how open sellers are to compromise in the slow season. They don’t want to make one more payment hoping that a buyer will appear in spring, they want to move on as much as you do. You’ll find some discounts this time of year that will put Black Friday sales to shame as long as you’re flexible and willing to put some time into your home search.