When the Heat Goes On, the Price Comes Down

As I put on my first long-sleeve shirt of the season to go running this morning, I reflected on what the changing weather means for real estate.  Although spring is the traditional listing and buying season, based on the school year schedule, Labor Day brings a bump that lasts until about Thanksgiving.  For sellers, the first time that they think about heating a home that's empty, or one that's too big, they also begin to worry about freezing pipes, snowplowing, and all the downsides of winter.  We are not unaccustomed to getting calls from sellers, who previously had been saying that they were not in a hurry and didn't have to sell, asking why there have been no offers.  At that point, they are often willing to get serious about pricing their property to move quickly.  Of course, we remind them that they have a window before winter, which is quickly disappearing.

If you are a buyer, this is when you should be serious also.  It can take longer to close during holiday season, so don't take too long to make your offers and sign your contracts.  The end of the year is rapidly approaching.  Take advantage of this time to buy a great home at a good price with a low mortgage rate!

A Warmer Winter?

To us, a warm winter is one with a lot of real estate sales! The recent extension and expansion of the homebuyers' tax credit gives us hope for the traditionally slower months. Because of the timing on the new bill, sellers and buyers should realize that they can't wait until the spring market. Buyers who have no home to sell (usually the first-time buyers) can probably put off finalizing a sale, since the contract must be signed by April 30,2010 and must close within 60 days, by June 30, 2010.

Many of the houses listed in the so-called "spring market" are still coming on the market even into May, so it won't be possible to wait until all the possible choices are available for viewing. Of course, if a buyer also has a house to sell, he or she should get started right away, since that could take up the intervening months. In addition, people should factor in extra time for mortgage approval, as we have been finding that the appraisal process in particular is taking far longer than it did before.

All of that leads to the conclusion that buyers who wish to take advantage of the tax credit cannot risk waiting until the spring rolls around. Since sellers certainly need to start soon, that argues for a busier winter than we're used to having. Don't forget that, although the holidays are busy and it's difficult to schedule showings, many homes look their best when decorated. In addition, the snowiest and iciest months are later in the winter, so now is better from that angle. It's also good to remember that it can pay to list when there isn't much around to compete. Once others realize that time is of the essence, you can already be negotiating your sale and moving on to a new purchase.

It's the Buying Time of Year Again

Our agents have heard me say this every year, but it's time to say it for this blog: The best time to buy a house is between Halloween and Thanksgiving. Sellers are ready to sell, as they start to pay heating bills, think about plowing, and head into the holidays. Buyers are mostly settled into new homes or forgetting about buying until spring. It's hard to show houses in the winter. There's snow and ice, not to mention cold. Parking and driveways can make open houses and showings tricky. Although many homes show well when they are decorated for the holidays, most families are busy at that time of year and don't want to have to keep their homes clutter-free and ready to show. Most buildings look better in light, and there isn't much of it in the dead of winter. All of that adds up to the realization that, if you haven't sold your home within the next three weeks, you probably aren't going to sell it until the spring.

Despite that chilling thought, there are sellers who want to move at this time of year. For one thing, some have tax reasons for wishing to close before year end. Some have jobs or commitments in other places. Some are tired of the selling process, and some have another home waiting for them. Some just want to spend the winter in a warmer place. All of those people are competing for the buyers still looking when winter comes. Therefore, if you are an eager seller, you are most likely to compromise on the price at this time of year.

Buyers can capitalize on these factors to negotiate for a better price as the weather gets cold, especially if the home is empty and sellers are worried about freezing pipes and empty oil tanks, or even just heating and plowing bills. This is the time of year when a month of expenses can easily become six months of expenses, and sellers will take that into account.

If you are a buyer, particularly a buyer with cash, here's your chance! Don't waste it--buy now.