Real Estate is a seasonal business much like the retail business. For retail businesses, winter and the holidays that accompany it are HIGH season. For real estate, however, traditionally winter is the LOW season. Property owners, whether home owners or real estate investors, don’t want to move or focus on looking for investment property during this time of year. This fact could be a benefit to a ready, willing and able buyer. In fact, some of the best real estate deals I’ve personally made have been in December. So what are the reasons that great real estate deals can be found during winter months? Here is a list of things to keep in mind while you are looking and negotiating for property this off season:
Why the Off-season for Real Estate Sales Offers the Potential for Deals
- Competition – Historically, more retail buyers look for homes in spring and summer – this reduces competition in winter. Some stats show first time buyers are less likely to be out looking this time of year as well. With fewer buyers overall and many of the emotional buyers sitting on the sidelines, there is less of a chance of properties having multiple offers and being bid up. For the savvy home buyer or real estate investor, this makes it more likely you’ll find a real estate deal you just can’t pass up.
- Lower Prices – According to The Balance “…home prices typically drop to a 12 month low” in the month of December.
- Weather!! – In many parts of the country the weather starts to play a role. Cold weather mixed with the potential for rain or snow/ice can keep the competition away.
- Motivation – Sellers who are selling a home in the winter tend to be more motivated to make a deal. According to Gibson Sotheby’s International Realty in Boston “…those who do choose to sell at year-end are often under pressure and highly motivated to cut a deal. A seller who’s looking to move a piece of real estate during the holidays is a seller who needs to sell, because nobody in their right mind would pick that as the most convenient time to list their property. And that is why the year-end might be a smart time to buy: Determined property-hunters can take advantage of sellers’ urgency.”
Expenses – In some states this is also the time of year expenses increase, such as heating bills, property taxes, property upkeep and other utilities. These expenses can add up making selling more attractive.
- No Income – Rental properties that are vacant as Thanksgiving approaches tend to stay that way through the New Year. With no income and vacant unit(s), it might be a better option for the owner to accept a real estate deal that is less than ideal for them so they can move on.
- 1031 exchange- Rental property might also be a good buy because there are owners who are looking to 1031 exchange before year end. The sale must be booked on or before December 31st, which is a motivation for sellers.
- New Start – Some property owners are embracing the festive holiday mood and the potential for a fresh start in the new year. That being the case, they are looking to complete their real estate deal and focus on what lies ahead.
Everyone likes a good deal, and for fix and flippers this is a perfect time of year to find a great real estate deal, make a purchase and have a project ready to go into rehab and be marketable for sale in the early spring.
Diana D. Hill – firstname.lastname@example.org