Conventional real estate wisdom says that listing in the spring during the prime selling season — and warmer weather — will get you the highest price. Now that we have officially entered the holiday season, with Santa Clauses on every corner and ugly sweater parties filling up your social calendar, you may be tempted to hit pause on putting your home on the market until the spring. “After all, the weather is frightful,” you say. “The buyers are hibernating for the winter,” you say. And besides, you protest with an almost child-like pout, “I won’t be able to put up my Christmas light display this year!” But not so fast, Mr. Seller Scrooge. Putting your house up for sale this winter could actually give you an edge over the competition. (And the same goes for those hope-filled buyers — since they’ll have fewer people to compete with and less chance of bidding wars).
Before you call “Bah! Humbug!” on this theory, we think you owe yourself a trip down real estate research lane. Shall we take a tour of the Ghosts of Real Estate Past, Present and Yet-to-Come?
A Redfin study published in 2013, which looked at more than one million homes between 2011 and 2013 in 19 major markets, debunks the myth that selling or buying a house in the winter is for, well, real estate suckers.
For example, houses listed from Dec. 21 through March 21 had a 9% greater chance of selling within 180 days closer to the asking price vs. homes put on the market from March 22 through June 21. Listing in summer is even worse. The same study shows homes listed from from Dec. 21 through March 21 had a 10% greater chance of selling at or near asking price vs. homes listed from June 22 through Sept. 20. The reason? Home prices actually peak in late winter/early spring when the least number of properties are on the market, but people are already out looking. So if you get past the skeptical looks and snark from your know-it-all friends, you might actually gain from putting your home on the market during the holidays.
On the flip side, there are holiday bargains to be found for buyers too. If you find an older listing that has been on the market since late summer, for example, a seller may be more likely to cut a deal and close before the end of the year. There will also be less competition — which everyone knows has been a problem in the inventory-challenged, bidding-war zone of California.
In that same report “Zillow Talk: The New Rules of Real Estate,” the authors found that winter is actually a very close second to the spring window of mid-March to mid-April. Believe it or not, it was just one percentage point behind in each measure. In California, where winters are generally milder (and in certain locales like Southern California where they are even milder), the same wisdom may not apply. After all, who’s to say that buyers would be deterred by 50-degree days? It’s an opportunity for them to finally dust off the ol’ Patagonia jacket!
Also, timing always depends on supply and demand — and in some hot California markets, like San Francisco, Oakland and Los Angeles where pricing and activity has remained strong — sellers may not see much of a price advantage to waiting.
Of course, there is nothing like studying the present dynamics of your marketplace. Here are two things you can do to take maximum advantage of the Holly-Days and beyond:
1. Understand your local market. Check the number of days on the market for current and recently sold listings. If most are sitting for more than 60 days, it’s safer to wait until spring, when more buyers will emerge. If properties are selling quickly, consider it your green light to list.
2. Price it right. Because there are less home shoppers in the wintertime, it may not make sense to price low in the hopes of encouraging a bidding war. Likewise, it could also hurt you if you price your home too high because you may end up dropping the price below market value before new properties hit in the spring and make yours look stale by comparison. The safest bet is to price your house at market value. Check closing prices of comparable properties sold in the past 30 days, then eye current list prices to make sure your home won’t look overpriced.
This is the most difficult picture to view, since no one has a crystal ball. We can look at sentiment. According to the California Association of REALTORS®, for example, their optimism of market conditions over the next year has been trending downward for the past few months but is still in positive territory at an index of 54 in October, unchanged from September but down from 57 in October 2015. They cite housing affordability and lack of inventory as continued concerns in the Golden State. But this isn’t necessarily predictive.
As always, the decisions rests with you, as faithful California buyers and sellers. What does your financial picture look like in the next 5-10 years? Would it really benefit you to wait three or four months to wait to list your home? Should you stay put for another year, if you can? Or should you hold off on buying at all? These questions must be answered with care, thought and analysis. Your personal set of circumstances will ultimately determine the best outcome. Gather around your financial advisors, your tax professionals, your real estate agents, your significant others and your families — and hopefully together, you can come up with a plan of action that truly transforms your real estate future for the better.
Whether you choose to buy or sell this holiday season, just remember: it’s a special time, meant to be spent with those you love in the warmth of home.