Potential home buyers always ask me “When Should I Buy?” or variations on the theme such as “I’ve heard it’s better to buy in winter.” The answer to when is the best time of year to buy depends on your goal. Are you trying to get the best selection? Are you trying to maximize your negotiating power? Are you trying to minimize your cash outlay?
Take a look at this graph of inventory levels in Northern Virginia:
You can fairly easily see the pattern in inventory levels–they rise in the Spring, drop over the Summer, and have a second, smaller bump in the Fall before dropping off in the Winter. For the most part these seasonal trends can be explained by the school year. Families try to be settled in time for September start dates, which means a move over the Summer, which translates to a Spring listing date (not to mention the psychological effect of springtime renewal, time for change, etc.)
So if a buyer is trying to maximize their options (as is often the case given the recently low inventory levels in our area), then Spring is the time to search. Sellers know that’s when the majority of buyers will be out, so their preference is to list then–it’s basic supply and demand. BUT, what happens when a home doesn’t sell in Spring….or in Summer…or in Fall. Then the Seller either pulls it off the market to try again next year OR it still sits for sale. Most buyers cocoon for the Winter, so demand drops even more than supply. In Winter, the balance of power tips towards buyers for properties that have been sitting on the market since earlier in the year. BUT be warned…there’s usually a reason they’ve sat on the market unsold. Consider it the picked-over inventory. So while your buyer negotiating power might be higher, you may not have any interest in the homes that are actually available to you.
Buyers also need to factor in their own timing: When does your lease expire? Are you due for a raise that will enable you to purchase a home that you won’t outgrow as quickly? Are you able to save more money for a down payment in the next six months? Can you even find a home that meets your criteria or are your expectations unreasonable for the price range?
I advise my clients to start their search as soon as they’re financially stable and theoretically would buy the right house if they found it. There’s no guarantee you’ll even find a home you like, and it may take you much longer than you think anyway. And it never hurts to start getting familiar with the inventory so that you’ll “know it when you see it.” There’s no easy answer to the question, but if you focus on finding a home, rather than trying to time to market, that’s a step in the right direction.
Get started with your home search by attending a free First Time Home Buyer Class.