The holiday season has traditionally been the best time to score a deal on a house because people are often too busy with overpacked calendars (that stretch from Thanksgiving to the New Year) to worry about selling their house—or buying one.
The advantage for buyers is that there’s less competition, and home sellers are usually more motivated to offload their real estate (hint: prices might come down) during the holidays.
However, some experts say this winter is likely to see more home-buying activity than in years past. With existing home sales continuing a five-month climb in October—outperforming October 2019 by 26.6%—the holiday real estate market could be hot enough to melt the annual real estate freeze.
“The rapid rise in home prices shows a housing market that’s on fire, and one that is not showing signs of letting up,” says Ali Wolf, chief economist at Zonda, a housing market research and real estate analytics company. “Potential homebuyers usually get distracted in the winter with travel and the holidays, but this year is different. There is a direct correlation between people spending more time at home and strong housing demand.”
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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 prices on real estate.
The amount buyers spend over the value of a home, according to the report, is an average of 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 house falls right between Thanksgiving and Christmas: Dec. 4. The second best day comes a few weeks after the New Year, on Jan. 26. These buyers will pay market value, rather than paying a premium above the value, which is common in a seller’s market.
These dates might change depending on where you live. For example, Ohio and Tennessee had the largest discounts off of full market value (-7.4% and -6.2%, respectively) in January; Michigan’s (-7.2%) and Delaware’s (-6.3%) discounts didn’t arrive until February.
The 2020 housing market is different from historical patterns in so many ways that leaning on history to gauge the future is like trusting an Ikea chair your toddler put together. There’s a chance it will function like a chair, but it’s a slim one. What we do know is that buyer demand remains heightened and mortgage rates continue to slide, two signs pointing to a warmer-than-usual market into the holiday season.
“Several important forces continue to work in favor of the housing market,” says Todd Teta, chief product and technology officer at ATTOM Data Solutions. “They include rock-bottom interest rates, unemployment patterns that have caused less harm to middle- and upper-income earners with the resources to buy homes and near-record stock market values that provide many home seekers with the financial wherewithal to make down payments on home purchases.”
However, this all could change if Covid wreaks more havoc on the economy without a relief package to save the day. At any point, unknown numbers of home seekers could rethink whether they want to buy amid such uncertainty, Teta warns.
The Worst Days to Buy a House
The housing market ordinarily speeds up around spring and chugs along into summer. Kids are out of school and people have time to shop around. Many families try to buy a home between May and August.
All of this translates into a lot of buyers competing for the same houses, which drives up prices and leads to more expensive real estate.
The worst day for buying houses, according to ATTOM Data Solutions’ analysis, is June 17, when buyers pay an average of 9.2% over the value of the home.
With more students doing remote learning, it’s tough to predict what buying patterns will look like next summer. It’s reasonable to expect uncertainty around school and work until there’s an approved vaccine and the country can begin opening its doors without the threat of infection.
Although school districts might not be the prime motivator for some buyers, in-home classrooms and home offices are certainly becoming a priority.
“Rising Covid-19 cases 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 upgrade their living situation,” Wolf says. “The nesting trend is expected to repeat itself over the next few months.”
What Homebuyers Should Do to Get the Best Price
Although Covid has changed school and work situations, and even reshaped what the holidays will look like this year, cost-conscious homebuyers should still keep an eye out for real estate deals this winter.
When the president declared a national emergency on March 13, most open houses were cancelled and many sellers yanked their homes off the market as buyers were worried about touring homes and even going into offices to sign mortgage documents.
With more information, online lending tools, video home tours and protective gear available, the housing market isn’t expected to halt during this new wave of Covid cases.
And although the holidays might not be as busy (less travel, fewer gatherings), experts still expect some degree of a 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 that there might 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 hustle during the hectic holiday season. This is key. If they’re distracted by the holidays, then you’re at a disadvantage. You want to find someone who is on the hunt for a house with you, regardless of the date.
Finally, be prepared for a sudden open house or private tour opportunity. Don’t put off viewing a new listing, otherwise someone else might scoop it up. If it hasn’t been listed and you have a chance to view it, this could be a golden opportunity to make an offer before anyone else sees it.