I wanted to entitle this newsletter “Winter is Coming,” but decided that comparing buyers to the Dead Walkers might not go down well. Besides, it’s buyers that have been getting the short end of the, um, spear for years now. Prices really took off in 2012; with inventory relentlessly low (see my previous newsletter, it’s been a seller’s market ever since.
But everything slows down in winter. There’s (even) less inventory, and buyers — being human — batten down the hatches from approximately Thanksgiving through early February. Who wants to be out house-hunting when the weather’s turned cold and dreary? Besides, everyone is either preparing for or recovering from the Holidays.
Meanwhile, sellers, also human, do the same. They reduce the price on homes that are already on the market; withdraw unsold homes; or hold off listing their homes till the Spring (see the three charts below).
You might think that if there are fewer buyers chasing fewer listings, nothing much would happen to prices. But in fact buyers seem to come out noticeably better. That’s reflected both in lower “premiums” above list price overall and in a lower percentage of homes selling over final list price (see the two charts below).
Let’s be clear: these are averages. If you’re hunting for the perfect home that checks all the boxes, you will probably find yourself with plenty of competition. That’s especially true for single family homes, which are a shrinking part of the market. But, overall, there’s just less activity — and that tends to be good for buyers.
So, buyers, here’s some advice: Bundle up, hope for lots of rain, and keep looking! Winter is your friend!
And, for those of you who have gotten this far, a competition! First person to email me the location of the picture at the start of this newsletter gets a nice bottle of wine.
Enjoy these Indian Summer days and don’t hesitate to contact me if if you have questions about the market or comments about this newsletter!