Spring and summer are the most popular time of year for buying homes, but that doesn’t mean they are the best times to jump in to the housing market. Fall and winter offer several advantages that will be of interest for any homebuyer, though first-time homebuyers will want to pay special attention. This is because the savings that can be earned by shopping smart in the fall and winter can make the transition to home ownership that much easier.
Home Prices Are Lower
Statistically speaking, fall and winter is the best time to buy a home. Some real estate analyses have shown that homebuyers pay an average of 2.6.% below estimated market value for their homes in October. This may not seem like much, but it can work out to a lot when you consider the price of homes. If a home’s market value is at $300,000, for instance, then that 2.6% means you get an extra $7,800 in your pocket. Other probes have found a clear, seasonal pattern of rising prices through spring and summer followed by falling prices through fall and winter. From this perspective, getting a home under contract around December (so that closing is in January) can yield the most savings.
Although the specifics about how much a homebuyer can save varies from analysis to analysis, the common thread is always that fall and winter have lower prices than spring and summer.
As mentioned, spring and summer are the most popular home-buying seasons. This means that by the time fall comes around, a lot of those buyers will have already found a home and cleared out of the market. Even those who didn’t manage to buy might still drop out if they prefer to wait until the new year. This gives you less competition for the properties remaining on the market. Not only does this let you be a bit more thorough and patient in your decisions, it reduces the risk of getting outbid or being forced into a bidding war that could drive up the price.
First-time homebuyers will be particularly interested to know that property and mortgage taxes are both deductions that can be made on your income tax. You can take the deductions for the entire year, regardless of when the actual closure date was. This means that closing in December can yield a year’s worth of savings while cutting down the time you have to wait to be able to actually claim the deductions on your return.
Better Negotiating Power
You are often in a better negotiating position when trying to buy a house in the fall or winter. This is because the seller, who may have placed their asking price on the high end during the summer, will be inclined to reduce their price to more realistic or even discount levels. The holidays also add to your advantage since it’s common for sellers to want to get the sale done before Thanksgiving or Christmas so they can spend the holidays in their new home with friends and family. A lower number of buyers during fall and winter also means that a seller can’t have the same guarantee as another offer coming along in a timely manner. Bottom line: sellers have a lot more incentives to negotiate with you and are more inclined towards accepting a lower price.
Look to LUSO Federal Credit Union for Residential Mortgages
LUSO Federal Credit Union is a not-for-profit, member-owned financial cooperative dedicated to providing members with quality financial services and products. We at LUSO pride ourselves on serving the financial needs of our members and helping them secure home loans and residential mortgages with reasonable interest rates. Our services are available in Ludlow, Springfield, Chicopee, Westfield, and Hampden County, Massachusetts.
Feel free to contact our Ludlow branch toll free at 1-844-LUSO-FCU or our Wilbraham branch at 1-800-808-5876.