You’re Buying a House? When?
If you’re new to the world of real estate and this is your first experience buying a house, you may have heard the expression, “location, location, location.” Well, we’d like to add another expression to your real estate vocabulary, “timing, timing, timing.” That’s because when you buy – or sell – a home, timing can make a tremendous difference in how much you get and how much you pay. We hope this little primer will help you get the most out of one of life’s biggest investments.
Timing the Real Estate Market
Many people try – and fail – to time the stock market. While there are some governing principles about “buying low and selling high” and “when to get in and when to get out,” timing the stock market doesn’t work for most of us. Real estate, however, is a lot different in its predictability. There are many statistics from a number of government resources such as the Federal Reserve and the U.S. Census Bureau, as well industry sites such as Zillow.com and realtor.com. Together, they provide enough data to provide an accurate view of the best time to buy a home. This data considers a number of factors, including the following:
- Percentage Above Asking Price
- Median Sales Price at Closing
- Median Days on the Market Before Closing
These factors, weighed together, help determine the best and worst times to buy a home. Of course, if you’re selling a home, you have to look at the whole equation from the other side!
‘Tis the Season. Or Is It?
While we’ll be looking at reasons people buy homes when they do, the following chart, created from a study conducted last year for fitsmallbusiness.com, provides a great picture of a month-to-month home buying activity.
Source: Fit Small Business
You can draw your own conclusions from the data, but the consensus is that January is the best month for buying a house. Why? Because homes purchased the first month of the year tend to have been on the market longer. The holiday season has people focused on other purchases and family commitments. Many people, especially those with school-age children, had to get settled before fall classes began. They may have already purchased, but likely had less negotiating power because of their own circumstances. Bottom line: if you can wait, you’ll probably get a better deal.
On the other hand, June is the considered the worst time to buy a home. Again, why? Because June is a great time for people to be outside looking at homes. June is also primetime for marriages, and newlyweds are looking to get into their first homes. The data shows that, even though more new homes come on the market, demand is up, median home prices are up, and yet homes are on the market for the shortest time. Consequently, buyers lose their power to negotiate.
Some Exceptions to the Rule of Data
Yes, there are always exceptions to the rule. Consider geography, for instance. Getting people out and looking at homes in northern New England when the snow’s flying certainly affects home sales. Similarly, tooling around Florida in the middle of the summer is not everyone’s cup of tea.
Sometimes buyers are just in the right place at the right time. Death and divorce often leave people in desperate financial straits, where they simply can’t wait to sell when they’d like. People also may make career changes that prompt the need to sell. If their new company won’t buy out their mortgage, they may be anxious to sell. Again, you might get lucky, but don’t count on it.
Finally, fluctuations in interest rates can also make more expensive homes affordable or push less expensive homes out of reach. Our advice: look at the data, know the market, and you’ll end up ahead of the game.
It’s Always a Good Time to Consider a MasterCraft Home
With deep roots in North Florida, Mastercraft Builder Group specializes in semi-custom homes that are built to a higher standard. But more than building homes where quality comes standard, we build Florida communities that accommodate all kinds of budgets and lifestyles. When it’s time to think about buying a house, call us at 904.274.2773.