Even though it isn’t winter yet, housing prices begin to drop this time of year. Winter is a bargain-hunter’s paradise, but it is also house-hunting hell. Between Thanksgiving and Martin Luther King Day (or Super Bowl Sunday when the Pats are in the playoffs), demand dries up, but so does inventory.
The drain on demand is usually higher than the drain on supply. Sellers who can wait until the spring frequently do. The dead-of-the-winter sellers are those that have a compelling need to sell. They are looking for a qualified buyer – the sooner the better. That’s the paradise part.
Whereas, the drain on supply leaves the intrepid winter buyer picking through houses that didn’t sell — in other words, the leftovers. For buyers who are having a hard time finding what they want, the going just got harder. Therein lies hell. More buyers hunker down and wait until spring, fed up with the poor choices in the fall and the poorer ones in the winter.
It’s a lot like shopping for next year’s Christmas cards on December 26th. There are cheap cards to be bought, but you have to get lucky to find ones that match your taste.
Common mistakes that winter buyers make:
Keep your eye on the long-term livability of the house. The winter inventory is full of leftovers. Figure out why it didn’t sell in the spring or fall market. Either something is wrong with the house or something was wrong with the marketing (like it was overpriced.) Don’t get carried away with bargain hunting and choose the wrong house.
Also, in the dead of winter, sometimes “perfect” places come on the market and there is a feeding frenzy. Don’t get fooled by the shiny house – it will look good compared to the ones you’ve been poking through. Compare it only to your wants-and-needs list; judge it on its fit for you and its price.
Don’t overestimate the discount. As the winter moves on, seller’s discount less. They know that spring is less than four months away.
Things to do:
Drive your best deal by watching the dates in your transaction. Giving the sellers the date they need will get you the lowest price. (Beware that it doesn’t cost you extra for rent or an extended rate lock.) Sellers with empty houses want them closed as soon as you can close them. That takes away their responsibility to heat the place and to snow shovel. Sellers who are living in their house may want to close quickly (if the wolf is howling at the door) or may want a long closing time (in order to find their next house or condo.)
If you are house hunting in the cold weather, choose clothing that is convenient for the expedition. Wear shoes that are easy to take off, since sellers are more frequently asking visitors to take off or cover their shoes. Wear a coat that opens easily and isn’t physically heavy. Wear outwear that is washable, since it is easy to get oil, dust, cobwebs, or mildew on your coat in a basement, attic or garage.