The historical perspective
Seasonal buying patterns in real estate historically have created wonderful opportunities for property investment in certain parts of the year. While we currently are in an overall buyer’s market, Spring months create a mini-seller’s market as more buyers flood the market to try to secure homes prior to the new school season that begins in September.
Even in down times, families with children historically begin looking by March and April to try to find a home they can get into contract by June, and therefore close by August. In recent years, this “Spring market” has been creeping backwards, with that traditional start time backing up from March to February (usually starting with the weekend after the Super Bowl now).
The next most active season…
Another secondary mini-seller’s market is also created in the Fall, traditionally from September to right before Thanksgiving. Buyers looking at this time of year tend to want to be closed and in their new homes by Christmas.
Both the Spring and Fall traditional home buying seasons tend to create a vacuum in between, a mini-buyers market if you will. Thus, the months of January and August tend to make for the best, most opportune times for property investors to place offers. You don’t necessarily want to begin looking in these two months. In fact, it’s a good idea to be looking throughout the year. But if you’re patient and wait until January and August to actually place your offers and negotiate, you’ll certainly have less competition. And therefore you should be able to obtain better values in purchase prices.
The best month of all…
January, even more so than August, represents the best time in which to place offers. There is definitely a psychological barrier that is broken in the mind of any seller that’s had his property languishing on the market for many moths without an offer. But that barrier is then compounded once Christmas comes and goes, and the cold weather months hit. Shorter days, colder, fiercer winter weather, combined with a house that’s been sitting for months translates into feelings of desperation, and a “need” to unload their property – almost at any cost. So sellers will traditionally be more flexible in January than any other month of the year, since an attitude of despair exists in most sellers. So making offers in January is the prime time for property investors.
What if a “steal” opportunity presents itself outside of January or August?
Jump on it – and hope for the best. If you recognize a steal and feel waiting would be disadvantageous, then by all means make your offer quickly. Just understand that you’ll have a lot more competition surrounding you very quickly. In this situation, you have to hope that moving quickly will create a great investing opportunity you can capitalize on.
In general, try to keep your searching a year-round activity. But do your “pouncing” in January and August. You’ll find sellers the most amenable to making a deal then.
photos courtesy of raleighrealestatetalk.com, meted.ucar.edu, kristinnicholas.com