When is the best time of year to buy a home? RealtyTrac took a big data approach to this question, analyzing 32 million single family home and condo sales over the past 15 years. They compared average sale prices to average estimated market value at the time of sale to determine whether buyers paid a premium or bought at a discount.
Based on the closing date of the sale, they broke down the data by month, weekday and day of the year to identify when buyers historically have realized the biggest discounts. Below are high-level details.
- The best month to close on the purchase of a home is October.
- Out of 2.7 million single family home and condo sales over the last 15 years that closed in October, buyers realized an average discount of 2.6 percent below full estimated market value at the time of sale.
- Following October as best months to buy were February, July, December and January — all fall or winter months except for July, which was a surprise given that conventional wisdom would suggest that is a good time to sell but not necessarily to buy to buy at a bargain price.
- The worst month of the year to close on the purchase of a home is April, when buyers over the last 15 years have purchased at an average premium of 1.2 percent above estimated market value at the time of sale.
This is really great data, but their conclusion makes no sense!
Buyers make offers 4-6 weeks before the closing date. That’s when the deal is negotiated.
So if October 8th is the best day to close on a house, the best day to make an offer on a house is anywhere from August 19th to September 9th, using usual time-frames. However, someone may get an offer accepted on a rented property in February, or March, or April, or May and then close on October 8th.
When I reinterpret the data to focus on what we do, as exclusive buyer’s agents, there is some validity to it. We are making those deals that close October 8th sometime in August. In late summer, prices are generally lower than the prices in the spring market. Especially in our area, demand slows noticeably once we move beyond the time when buyers can move in before the school year starts. Lower demand yields more buyer negotiating power.
However, autumn house-hunting is also very good for buyers. Most of the other “good deal” closing dates are based on accepted offers in the late summer and into the autumn. After Oct. 8, the best days of the year to close on a purchase of a home were Nov. 26, Dec. 31, Oct. 22, and Oct. 15. (I suspect that December 31st date has some legal or tax advantage that pushes it into this group.)
- The best day of the year to close on the purchase of a home is Oct. 8.
- After removing perennial holidays such as Christmas Day, New Year’s Day, Veteran’s Day and July 4, our analysis found that over the past 15 years buyers who closed on the purchase of a home on Oct. 8 have realized the biggest average discount — 10.8 percent below estimated market value at time of sale — among any of the remaining 356 days in the year.
- After Oct. 8, the best days of the year to close on a purchase of a home were Nov. 26 (10.1 percent discount), Dec. 31 (9.7 percent discount), Oct. 22 (9.6 percent discount), and Oct. 15 (9.1 percent discount).
- The worst day of the year to close on a purchase of a home was Jan. 19, when buyers paid an average 9.6 percent premium above estimated market value at time of sale, followed by Feb. 16 (9.5 percent premium), Apr. 20 (9.5 percent premium), Apr. 6 (8.4 percent premium), and Apr. 27 (8.2 percent premium).