The best time of the year to buy property is when nobody else is looking to buy property. Therefore, the best time of the year to buy property is during the winter months. The rainier, snowier, and colder, the better.
Conversely, the worst time to try and sell property is also during the winter months. Listing your property around the holidays and during the middle of winter signifies desperation.
Savvy buyers know that if a seller wasn’t desperate, the seller could easily wait 3-4 months and list during the Spring when buyers come out in full force. The same thing for sellers listing during the middle of shelter-in-place versus waiting until open houses are allowed again.
The Best Time Of The Year To Buy Property
The best months of the year to buy property are: December, January, and February.
Here are the reasons why these are the best three months to buy:
- Nobody Is Buying. December through January are prime holiday months. The last thing anybody wants to do during Thanksgiving, Hanukkah, Christmas, and New Year’s is to shop for a house. The weather is generally also the worst during this time of the year. Meanwhile, due to traditional company budget spending cycles, there’re fewer job turnovers and relocations. Given these factors, your competition to find that perfect property goes way down.
- Desperate Sellers. Given we all know that the holidays are between November and January, the act of listing property during this time period indicates the seller is desperate. By waiting until February or March to list, a seller greatly increases the pool of potentials buyers. By listing between November and January, however, the seller may very well be shouting, “I can’t wait! I need your money now!” Thus, as a buyer, you have a much better chance of winning a lowball offer.
- See The Property At Its Worst. If you like the property during the middle of winter, then you should love the property during all the other seasons. Winter is when a property is subjected to the harshest conditions. You should test insulation, working pipes, the HVAC unit, the windows, etc. that get stressed during the winter. People have poor imaginations, which is why staging a home is big business. Your job as a buyer is to look beyond the shaggy green rug. Discover the beautiful oak wood floors underneath.
What About The Lack Of Property Supply?
As a buyer, please know there are still plenty of homes to choose from in December, January, and February.
One quick look on Zillow or Redfin will show plenty of homes for sale. Are you telling me you can’t find one home in the map you’d find desirable? Of course you can!
I’ve often seen agents, who because they are anxious to get a listing, will convince sellers to list during the winter because there are fewer competing homes on the market.
While I can see the merit in this selling point, over the past 20 years of observing the markets in San Francisco, New York, and Lake Tahoe, it’s almost always the case that demand for homes in the Spring, Summer, and Fall has far outstripped the increase in new listings before and after winter.
Don’t List During The Winter
Even if your home is amazing, listing it during the winter months may carry a stigma. Further, you won’t be able to attract families with children. This is because most of the time these families only move during the summer.
The biggest knock to a property is that once it stays on the market for over 60 days it becomes “stale fish.” Stale fish properties lose their emotional connection with potential buyers. Buyers start wondering what is wrong with the property. When buyers no longer feel emotionally connected, they stop making offers.
The best time to buy property is also the worst time to sell. People are creatures of habit. They will make new year’s resolutions to buy property. They will also tend to look for ways to spend their year-end bonus money, which often gets paid in February and March.
It is very hard to be a real estate buyer in December or January when your bonus money has not hit your bank account yet.
Real Estate Price Performance By Month
To determine the best time of the year to buy property, take a look at the real estate price performance by month.
Below is a great chart by the Federal Reserve and Census Bureau. It shows the median price and median days on market before closing for homes by month.
Based on the data above, you can see empirical evidence showing January has the lowest median sales price at closing and stays on the market the longest = the best time to buy a home. February is also a great time to buy a house as well.
Conversely, June is the worst month to buy a property due to its highest median sales price at closing and shortest days on market.
In addition to finding a home for sale during the depths of winter, you should also look for a sale due to a divorce, a job loss, or a liquidity crunch.
You can find such information out by simply inquiring with the hungry real estate agent eager to make a sale. Be opportunistic and take advantage of desperate scenarios if the math works. As a prodigious wealth accumulator, this is your sacred duty!
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Shop around for a mortgage: Check the latest mortgage rates online through Credible. They’ve got one of the largest networks of pre-qualified lenders that compete for your business. Your goal should be to get as many written offers as possible. Then use the offers as leverage to get the lowest interest rate possible. You’ll get free, real quotes in under three minutes. With interest rates at ALL-TIME lows, now is an incredible time to refinance. Also consider buying real estate now if you can get a deal.
Updated for 2020 and beyond.