December is usually when people are looking to deck their own halls—not buy new ones. But buying a home in December and January can be a smart move.
Michael Corbett, Trulia’s real estate expert and a bestselling author, is a big fan of the holiday season, what he likes to call "the lull." He says that savvy home buyers should take advantage of this time if they’re serious about buying.
“Mortgage rates are low now, although they are higher than they were six months ago, and higher than they were last March,” Corbett says. “The price increases that were common in metro markets such as Las Vegas, Fort Lauderdale and Orlando are slowing. Even Atlanta, which had an average 19% price increase last year, is showing signs of cooling.”
Corbett explains why the holidays are no time to take a long winter’s nap if you want to buy a home.
LearnVest: What do you like about what you call The Lull, which is in December and January?
Corbett: There isn’t a lot of competition. People know they’re going to be busy or traveling during the holidays, so most deals have been wrapped up or people have put off looking until after the New Year. There are still homes on the market, but not as many people gunning for them. This is an advantage to both buyers.
If it’s a slow season, doesn’t that mean inventory will be lower?
Yes, but the sellers are motivated. These are likely the homes that for whatever reason didn’t go during the peak season. The sellers will want to get the deal closed, especially for tax purposes. For a lot of people, it’s mental. It’s the end of the year and they want to tie up loose ends. This is an advantage for buyers, especially if there are points to negotiate.
Would other key people in the equation, such as realtors and mortgage brokers, also be scarce?
I know a lot of realtors who love this time of year. They say they get a lot of business done because the people who are out looking are serious. As a buyer, your broker will have more time to focus on you, as opposed to other times of the year when they might be juggling more clients. You may not be able to close before the end of the year, but it’s a good time to get something under contract.
"Buying in winter may be the ultimate litmus test for a home, since all the big systems such as heating, plumbing, and the roof and gutters are put to the test in the cold."
Could a homebuyer miss or overlook something while buying in the dead of winter?
Buying in winter may be the ultimate litmus test for a home, since all the big systems such as heating, plumbing and the roof and gutters are put to the test in the cold. Some of the curb appeal may be gone, but fixing landscaping is a lot less expensive than finding out months later that your boiler doesn’t work.
Would a slow winter market be prime time for investors?
Investors are looking for fresh properties, often things that aren’t even on the market yet. The chances of getting outbid by an investor during a winter house hunt is unlikely. Few brand-new properties come on the market this time of year, so the investors won’t be circling.