Investing in a new home in the spring or summer can be a particularly busy and hectic time, but it is still the best opportunity to get the most favorable return.
Many buyers are starting to feel sidelined when it comes to buying affordable home due to higher mortgage rates, rising prices and fierce competition. This was very noticeable in July when there was a lack of existing-home sales that progressed at a slow pace that has not been seen in the last two years (source: National Association of Realtors)
Once fall arrives, there is expected to see a shift in the market that has the potential to benefit buyers. For instance, the listed homes throughout July saw a rise of 5.7% on properties valued at $350,000 or more (source: Realtor.com).
The swell in inventory mostly relates to markets that have seen continual growth in price that is now decelerating. In truth, many of the housing markets witnessed an upturn in their inventory levels on a year-over-year basis.
Essentially, as a result of these changes and a decline in buyer competition, buyers are given more flexibility in their buying options.
While it is still a seller’s market in plenty of areas, the tide is starting to shift in the opposite direction.
Once the fall and winter period arrives, many buyers will benefit from having greater negotiating ability.
The majority of would-be buyers with small children are likely to give up on moving to a new home by around August because they want to avoid any disruption with the start of school. According to National housing data, the months of August and September have the most significant reductions in the market value of a property compared to other times of the year.
Even thought the fall has fewer options compared to the spring, many buyers will be in a position to find the more favorable deals.
Basically, the fall period is the time when sellers have their last option to sell on a property before the year end. Additionally, with a lot less buyers in search for a new home, the sellers are more competitive in pricing the home in an attempt to attract the attention of buyers.
A further benefit for the buyer in the fall is the ability to find the most flexible terms, such as home inspection repairs or longer closing times. Any home left of the market for a long period of time will have a seller that is more willing to negotiate.
With the arrival of November there is a considerable slow down in the number of sellers and buyers active in the housing market. The options to buy a suitable home are a lot more difficult as the year advances into November and December. However, this can be a time of the year to take advantage of the housing market.
There are sellers that can’t afford to wait until the more vibrant selling period arrives in the spring. But, there are plenty of people that don’t intend to move because of the holidays and cold weather.
Try looking at local data to help narrow the buying window. The most preferable time to buy or sell will be dictated by things like historical trends, economic conditions, climate, local seasonality, and supply and demand.
It is worth looking out for times of low demand and high supply. If you catch the opportunity, this is a great time to pounce for the most attractive deals.
A period of low demand can easily vary in the housing market. As a buyer, it can benefit to stay in touch with your real estate agent to help determine the best time to look for a special deal.
Let’s take a look at a few of the useful questions to ask:
Check the number of your preferred style of house that has recently sold or are currently for sale.
Ask about the average selling price of these properties.
Find out the typical time-frame these houses are open on the market.
See if these houses are more popular today compared to 12 months in the past.
Check to see if these homes receive many price reductions before sold.
While you will have more negotiating options out of season, it is still important to avoid asking for too many contingencies because this can easily kill a deal. Additionally, it is useful to have a home inspection completed to avoid having to deal with major issues at a later date.
However, a key factor to focus your attention relates to the price. Make sure you have the funds approved to buy the preferred type of home.