The temperatures outside may be plummeting, but the potential for a hot homebuying and selling season this winter may be rising, the experts say.
Typically, late fall and early winter are slower for home sales, as buyers and sellers focus on the holidays and await the spring buying season, which traditionally starts around the NFL Super Bowl. But with market indicators showing a housing recovery underway – as evidenced by a recent uptick in housing starts and building permits, increased confidence and demand from buyers and decreased supply of housing inventory – sellers and buyers may want to postpone their hibernation plans and jump into the market now.
In addition to the apparent housing recovery, sellers have another profound advantage this winter – historically low interest rates, says J. Varnie Barker, real estate expert and author of “New Rules of Home Ownership for the 21st Century” (Selvar Enterprises, 2011).
“The convergence of these two events could spruce buyers’ confidence and trigger more sales, regardless of climate conditions,” Barker says. “This gives sellers an advantage as well as an opportunity to sell their homes during these winter months.”
Barker warns that the strategy of holding out until the spring to list a home could backfire on sellers this time around.
“The selling and buying process will be less cumbersome and faster [this winter] because the number of buyers will have dramatically reduced, while the refinancing frenzy is declining. This will reduce the number of closings and afford banks and title companies more time for faster closing,” Barker says. “Also, people looking to buy during the winter months are not just prospecting – they are serious, have usually gotten their finances together and are able to make a quick buying decision. More often, the ‘lookers’ wait until spring to make buying decisions and are more tentative.”
Additionally, as the federal and local governments find new ways to reduce the current numbers of distressed properties and banks aggressively try to unload their supply of foreclosed homes, housing inventory will reasonably diminish, giving sellers the ability to better compete.
Another factor is price appreciation. Home prices in many markets have hit bottom and are trending up, says Wendy Forsythe, executive vice president and head of global operations for Atlantic and Pacific Real Estate, Santa Ana, Calif. Hence, buyers may want to shop for deals sooner rather than later.
“And jumping into the market early this winter – when there are fewer listings for potential buyers to choose from – could lead to a more favorable selling price for the seller, as less supply than demand leads to higher prices,” Forsythe says.
While the climate may be favorable for house hunting and listing properties now instead of weeks down the road, it doesn’t necessarily mean that consumers will capitalize on the good timing, says Jacky Teplitzky, managing director with Prudential Douglas Elliman in New York City.
“I think we will see a normal [winter] season. For buyers who need to buy, they will have to compromise on their wish list and pull the trigger on buying. Others who don’t have to buy immediately will continue to search,” Teplitzky says.
Barker predicted that the majority of shoppers will suspend their decision to purchase until the spring because of three prevailing events weighing on their minds.
“Most buyers believe that interest rates will continue to decline, thereby giving them an even better and more affordable and competitive buying opportunity,” Barker says. “They are playing a wait-and-see game. Second, most buyers shift their focus from home buying to the holiday season. And third, the job market will influence buyers’ decisions. Most buyers will wait for a more reliable prediction for jobs and employment.”