When Is The Best Time Of Year To Buy A Home
When’s the Best Time to Buy a New Home?
By Mary Umberger
When's a smart time to buy a new home? That depends on what your needs are. If you have a growing family, you may consider buying a home in the spring.
Everyone knows that spring is the best time of the year to buy or sell a house? Isn’t it?
Not necessarily, though it’s probably hands-down the busiest time in the real estate year.
Real estate and home building experts say that an emphasis on the spring home buying season has its roots in practical reasons and also in some enduring misperceptions about the marketplace.
For one thing, in spring, people who have been cooped up over the winter are ready to bust loose, get out and sample the sunshine. And for many, a potential address change at that time fits nicely with the school calendar.
“I typically hear people say, ‘I want to sell my house in spring and summer because it’s the best time,’ ” says Amanda Howard, who owns Amanda Howard Real Estate, a brokerage in Huntsville, Ala. “For some people it is, especially when it comes to transitioning kids into a new school. Doing it then makes that simple and easy. So yes, I think in some ways, for some people, the best time to buy is spring.”
Rethinking the Seasons
But Howard, among others, suggests that the best time to sell might be in the fall or winter.
“That is prime time,” she says. “True, in fall and winter, you have less inventory out there, fewer homes to look at. But people who are buying a home in fall or winter, those are serious buyers. They are buying with a purpose – whether they’re getting divorced or just realized they’re having triplets or they’re getting a job transfer. There’s a reason for that move.”
And agents say that though you might have a horde show up for your springtime open house, precious few of them might be earnestly looking to buy. Tire-kickers, in other words.
“In my experience, in the season of nicer weather, you get more people out, kind of poking around, not really serious,” says Kevin Lisota, CEO and designated broker for Findwell Real Estate, a Seattle brokerage. “It may feel good to have 40 people come through your open house in May, but I’d rather have two people with their agents come through in December than have dozens of looky-loos (an industry term for less-than-serious buyers) in the spring.”
Lisota agrees that there will be less for buyers to look at in fall.
“But the competition is also lower,” he says. “And low inventory can increase the time you spend shopping, but that doesn’t necessarily matter – it only takes one house that you like, and it can come up at any time of the year.”
But if you have buying or selling in your mind for spring, an important factor to consider is that in real estate, “spring” doesn’t necessarily coincide with what it says on the calendar.
Spring starts in January in the real estate world
“(The spring selling season) starts out at the beginning of the year, in January,” Lisota says. “Right after the first of the year, there’s a burst of activity from people who have been waiting for the holiday to be over. It ramps up to about mid-May, which is when most people are listing for sale, and that continues pretty strongly through the summer. You’ll see listings tail off in summer.
“They’ll go down somewhat in September, more in October, down considerably more in November and then they fall off a cliff in December,” he says.
Not that there will be zero buying activity at year end. “One of the most fiercely competitive sales I did in the past six months was for a beautiful home that came on the market on Dec. 23,” he says. “The inventory of homes for sale is low enough and the competition from buyers high enough that it turned into a bidding war, with offers reviewed on Dec. 26.”
However, don’t count on a wellspring of enthusiasm from your real estate agent for such a scenario, he cautions. “A home inspection and writing an offer over the Christmas holiday was wildly unpopular with my buyers and myself,” he says. “But it was the right house for them and we made it happen, successfully outbidding nine other folks.”
What's Your Moving Timetable?
One way to set a personal real estate timetable is to decide when you want to be in (or out of) a house, and work backward from there. The amount of time it takes from contract to closing table can vary regionally, but agents suggest that a month is reasonable.
“A closing here in Huntsville typically takes about 30 days,” says Howard. She says for a while in the past few years, it took longer for lenders to process mortgages, but the paperwork time seems to be accelerating lately. Lisota says the timetable is about the same in Seattle.
But add on to that the amount of time it takes to find the house in the first place.
“For most of our homebuyers, two to three months is average,” Lisota says. “It’s been going up lately because people aren’t finding homes for sale.”
For sellers, it’s going to depend on local market conditions and price, both of which have undergone a transformation in many areas since the first of the year.
“The time frame has changed dramatically in the last 18 to 24 months” as the market has heated up, he says. “The average time on market in Seattle now, in a popular market at a reasonable price – they can get it sold in a week. Two years ago, depending on neighborhood, I would have said, at a minimum, it could be 90 to 120 days.”
Howard says that in her Huntsville market, the average number of days a house is on the market currently is about 120.
Many Builders Offer Both Quick Move-In and Built-from-Scratch Homes
If you aim to move into a newly built home, planning backward from a move-in date is even more critical.
You have a few timelines to consider. If you’re buying a quick move-in or “spec” home – a new home that has been partially or fully completed by the builder – the time from contract to move-in might fit that one-month (or slightly longer) span.
If you're designing and building a home from scratch with a production or large-volume builder, Lisota says, “I would plan for it to take from four to six months.” Lisota, who has worked with Seattle-area builders, adds, “bigger builders are pretty efficient and may get homes built more quickly. If you're building a new home from scratch with a smaller or custom builder, "those time frames may get a couple of months longer.”
Tom Molidor, whose Molidor Custom Builders is based in Clarendon Hills, Ill., and in Naples, Fla., says that though he isn’t a production builder, he thinks that some, depending on the house, can handle the process in a couple of months.
And “How long?” is the No. 1 question his clients ask, he says. In the custom-home process, finding the right a lot may take anywhere from a day to several months. And then there’s the matter of interviewing builders, which is a highly personal decision.
Once you’ve selected a builder, “the real first part, the design process, is completely up to you and I will never rush a client in terms of design,” Molidor says. “I’ve seen some designs in as little as five weeks, but some take five months. And once we have plans submitted for a permit, it really is dependent on which village or city you’re submitting to.” And he says he’s noticed municipalities in his areas seem to be moving faster on permits lately – it might be a couple of weeks, best-case scenario, in his experience.”
He tells most clients to expect actual construction to take six months.
The Best Time to Build
But back to the calendar: “People think we can’t build in winter, in a colder climate. But that’s not true. We can’t pour flat concrete – I can’t pour your driveway until it gets warm. But we can pour a basement floor because we can tent it and suspend heaters in the basement.”
The spring thing again: Molidor says many clients automatically presume construction needs to begin then. “I tell them, it can start whenever you want, but starting in winter can be advantageous, because the biggest detriment to (speedier) construction is rain. We can work in snow, but heavy rain stops us dead.
“I love to start a home in the fall because I know that the homeowner is going to be in it, typically in April or May, and then the ground is good enough that I can pour the driveway,” Molidor says.
So, the decision to build has been made: When to put your soon-to-be-former house on the market? “The best time to list their house is as soon as they say, I have found the builder I want,” Howard said.
A good rule of thumb, she said, is to presume that unforeseen delays could occur. “If the builder says it’s going to take three months to build, plan for four,” she said.
Freelance writer Mary Umberger has covered real estate and home-related products for publications such as The Chicago Tribune, Inman News and other leading print and online publications.
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January 10th 2017
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