Buying a Home During the Holidays May Be Smarter Than You Think!
The holidays are an extremely busy time for many people. With seasonal parties, family gatherings, cooking, shopping, religious services, and community outreach, the weeks between the end of Halloween through New Year’s Day can seem like a non-stop whirlwind.
Could you imagine trying to buy a house during the holidays?
For most people, this seems like an outrageous idea. Not only are we extremely busy during the holidays, but it’s not “real estate season.”
Before you completely discard the idea of buying a home during the holidays, you should know there are some real advantages to purchasing a property at the end of the year. And of course, there are, as in any time of year, disadvantages.
Benefits of Buying a Home During the Holidays
Potential for Aggressive Negotiations
As the real-estate seasons winds down, many sellers are still holding on to a property that did not find a buyer during the summer. These sellers, who may hold homes in a variety of price ranges, are often extremely motivated to sell their properties before the new year. This provides an opportunity for buyers to negotiate aggressively, using two key factors to their advantages.
- The first factor is one we already discussed, the fact that sellers have been trying (often desperately) to find a buyer since early spring.
- The other factor that can play to a buyer’s advantage is less competition. If most would-be buyers have already found their dream home, there are less options for sellers. Having a home on the market for months, and seeing fewer potential buyers, can put sellers in a mood to accept offers that they would have declined in June.
Potential Discounts for New Construction
The real estate market has been seeing steady, consistent numbers. In fact, it seems the COVID-19 crisis, which was expected (at least by some) to completely devastate the industry, has had a lighter impact that originally thought. The strength of the industry to pull through a massive health scare, lockdowns, and social distancing was driven in large part by new construction.
New homes jumped in total sales during the 2020 summer, but just like every year, it’s likely that developers and builders still have a few properties left on their books. They are often motivated to sell these properties before the close of the year, so you may find deeply-discounted new homes.
Interest Rates Often Lower During November and December
While interest rates are dependent on many factors, including personal factors such as credit score and debt ratio, it’s possible to get a lower interest rate on your mortgage during the holidays. Many lending institutions are competing for the remaining borrowers who are still active at the end of the year.
Host a Holiday Party in Your New House!
Perhaps the most exciting and immediate benefit from purchasing during the holidays is that you may be able to host a holiday party this year! If you work quickly, find the right home, and process the sale with expediency, it’s perfectly reasonable that you could be living in and enjoying your new home, just in time for a holiday party.
(To be fair, this advantage is likely dependent on purchasing and finalizing the purchase at least by Thanksgiving. If you are still looking for a house in December, the sale would need to be finalized in near record time for you to move in, set up, and host a holiday party.)
Downsides to Buying a Home During the Holidays
Of course, there are plenty of downsides to purchasing during the holidays, including limited options and the possibility for less wiggle-room on pricing.
There are simply fewer homes on the market during the holiday season. Sellers know that there will be fewer buyers, so they often wait until the spring season to list their homes, which can limit the available options for buyers.
If you are extremely choosy about the type of home you want to buy, then purchasing during the holidays may not be the right choice, as you are less likely to find a home with the right amount of rooms, the right amenities, in the perfect neighborhood, and at a price that fits your budget. Because there are fewer options, you may have to settle (for lack of a better word) for a house that doesn’t meet all of your expectations.
Fewer Sellers Will Negotiate
Earlier, we discussed how shopping during the holidays gives you the chance (but not the guarantee) to purchase a home at a lower price. But this thought really only applies to homes that have been on the market throughout summer. If the home is new to the market, you may be less likely to find flexibility from buyers.
In fact, data shows that people are less likely to drop their pricing in November and December. Information from Zillow, a major real-estate news source, says that over 14% of U.S. homes were discounted in June, July, August, and September of 2016. However, in December, only 9% were discounted.
In San Diego, 14.9% of home were discounted in July, 15.5% of homes were discounted in August (2016). But in December? Only 8.8%. This is only one year of data, and there could be many reasons to explain these numbers, but it seems that sellers are less likely to budge on pricing during the holidays.
Holidays Can Cause Potential Delays
While the process could move quickly, if the mortgage agent, inspectors, appraisers, or other professionals involved in the process are away for the holidays, you could experience delays. People may even be working lighter work hours, mitigating any advantages from having fewer potential buyers in the market.
Find the Loan You Need to Purchase During the Holidays
If you are ready to purchase a property, and want the sale finalized before the New Year, you need to get pre-qualified right away. Contact our team today and let us help you get the loan qualification you need so you can start shopping for a wonderful home!