Trying to buy or sell a home during the holiday season often raises questions about real estate market timing. Understanding how holiday timing impacts market conditions and decision-making will give you an edge in developing a strategy for this particular time of year.
On the positive side, there is less competition and more motivated buyers and sellers during the holidays. On the negative side, there are fewer listings, and the holidays disrupt regular business operations when home inspectors, banks/credit unions, and title companies are not working.
This guide can help you decide if the holidays are an appropriate time for your real estate transaction.
To give a balanced view, we'll start with the pros that are helpful to know if you decide to buy or sell real estate during the holidays.
There are fewer buyers during the winter holidays. This is due to the long-standing trend of families hunting for new places during the summer so that they can move in time for their children to go to a new school. Fewer buyers and sellers may make it easier to negotiate favorable terms. There's less competition than there might be during the warmer months.
For example, if the area is a hot market, there will be fewer potential buyers during the holidays, and you may not have to fight a bidding war with so many competitive offers. If the area is a buyer's market and you are the buyer, less competition could help you get a better deal.
There may be increased urgency for some real estate transactions during the holidays. Home listings during the holidays may be available due to some urgent need to sell them. Also, buyers may have some urgent need to purchase a home, such as wanting to secure a home before schools come back into session.
If you are a buyer, you want to work with a motivated seller to get the deal done fast and for a terrific price. If you are a seller and the potential buyers showing interest are motivated, you can strike a deal quickly, too. If there is an urgency on the other side of a transaction, you can use this need to your advantage. Urgency can lead to quicker sales with motivated buyers and potential bargains from motivated sellers.
If you are the seller, you can use a holiday theme when staging the home with decorations. You can use the smell of baking cookies and cinnamon cider to make it more welcoming. Homes that are decorated with lights for the holidays look cozier and have more curb appeal. Potential buyers can imagine celebrating in the home, which is inspirational.
The holiday market might yield price drops or incentives. Using the data from PropertyReach, you can set up filters to find properties that have been on the market for an extended period. If you are a potential buyer, you may be able to negotiate a great deal if the property has little interest with no takers at the listing price and it has been on the market for a long time. Asking for a price reduction during the holiday season is an excellent strategy.
Sellers may be more flexible with negotiations. For example, if you're a buyer who likes a house but wants a new carpet installed, you could ask the seller to pay for the upgrade.
Another potential bargain is a house estate sale. Estate sales are potentially very interesting during the holidays. If someone passes and the surviving family members want their inheritance in cash, a fast sale at a discounted price during the holidays may be the perfect solution. You get the house for a bargain price, and the inheritors may get to divide up the net proceeds in time for celebrating the holidays.
There might be some advantages for flexibility in closing times and getting a moving company. Suppose you want to put a home purchase under contract to lock up the deal at a discount during the holidays and then use an extended period to set up the escrow close after the holidays.
As far as moving companies go, they have far less business during the holidays. They may be more readily available to do your moving job for an attractive price if they are open and working during the holidays.
Conducting a real estate transaction during the holidays has plenty of disadvantages, which are also essential to know before looking into buying or selling during this time. These can include:
If you are in an area that experiences severe winter weather around the holidays, road closures and icy storms can delay any progress when it comes to showing the home. A sudden blizzard can wreck the attendance of potential buyers for a scheduled open house. Nevertheless, if weather conditions are awful and a potential buyer shows up, you know that person is serious!
Many people list their homes for sale during springtime. During the winter holidays, fewer listings may restrict buyers' choices. On average, the number of real estate listings is highest during spring and summer and shrinks during the winter holidays.
Homes also sell faster during the peak period of April to June. The median number of days on the market for a home sale in America during June is 31. From December to February, the median number of days on the market is 49.
Suppose you require a qualified home inspection before committing to an offer. If the inspector finds problems, such as plumbing that needs to be fixed, a furnace that needs maintenance, or other items that need repairs, it may be challenging to schedule the work needed to be done when some service and repair companies are closed for the holidays.
One way around this, if you are the buyer, is to get a discount on the purchase price to cover the cost of the repairs. You must exercise caution to ensure you have sufficiently discounted the price to cover those costs. It may be challenging during the holidays to get accurate quotes from a professional who can make the repairs.
During the holiday season, there are days when the bank/credit unions and the title companies are closed. Holiday commitments and potential travel can delay transactions. If you need tax advice or a real estate attorney, you may not find them readily available.
If people live in the home, they may be celebrating the holidays, meaning that bringing in an inspector to take a look could be more difficult. You may also encounter resistance from families who object to disrupting holiday celebrations to deal with a real estate transaction.
If you are the buyer, your family may not be very patient with your house hunting when they expect you to celebrate the holidays with them. One way to reduce this stress is to get everyone else involved as if purchasing a new home is a holiday gift for the whole family.
When the escrow is ready for closing, you may discover that the parties you need to sign the documents are out of the local area. Due to holiday vacations and taking time off, the person you need to sign may be in another part of the country, such as when visiting relatives for the holidays.
Some signatures can be done electronically, but in certain areas, you may need "wet" or in person signatures on some documents (like the title docs for recording with the county officials). Keep in mind that holiday vacations could mean that notaries and other signatories might not be available.
You may have end-of-year tax considerations. For example, you can postpone recognizing a capital gain by closing on January 2 instead of a week earlier. On the other hand, closing on a property before the end of the year might be advantageous in giving you tax deductions.
Consult your tax advisor to understand the timing and whether a slight delay is advantageous or if closing before the end of the year will yield better results.
The end of the year may also impact financing availability. Some lenders like to close their books at the end of each year and will not carry forward a loan offer past December 31.
Holiday demand could impact prices in popular areas. If there are fewer listings during the holidays in an area that is a seller's market, the sellers may bump up the price based on the expected year-over-year appreciation in home sales prices. In hot areas, the prices might be adjusted upward in the new year based on estimates of the appreciated values.
If you are a motivated buyer, you may find your perfect home during the holidays when the other buyers are less active, giving you a competitive advantage. If you are a motivated seller, you may need to aggressively price your home to stimulate a sale, and you may have less interest or fewer showings of the home. However, the potential buyers that do show up may be serious ones and not your typical "lookie-loos," who can waste a lot of time and are not really serious about buying.
If you need to buy or sell a home during the holidays, the advantages and disadvantages can balance out in your favor if you set your expectations correctly. Evaluate your timeline and priorities when deciding whether the holidays are appropriate for real estate transactions.
Whether you're a buyer or seller, information available on the PropertyReach database can help you find a likely property (as a buyer) or set a reasonable price (as a seller). Visit the PropertyReach website for more information and to sign up for a seven-day free trial.