It's the Most Wonderful Time of the Year
Conventional real estate wisdom holds that the prime period in which to peruse for and purchase a home is the spring. But fresh research suggests that there’s an even sweeter spot on the calendar: the month of August.
A new analysis by Zillow indicates there are more homes for sale near the end of summer than at any other point in the year, providing a wider selection of inventory and a better opportunity to score a bargain. Consider that, in August 2016, there were more for-sale listings in most major markets than any other month last year (8,000 more in August versus April 2016 in Los Angeles alone, for example). Moreover, the eighth month of the year has more price cuts: more than 15 percent of all listings last August had reduced prices compared to only 12.6 percent in March.
“Traditionally, early to mid-spring is thought of as the prime home shopping season, so it was somewhat counterintuitive to see that late summer actually offers a lot of inventory to choose from and sometimes better prices,” says Dr. Svenja Gudell, chief economist for Seattle-headquartered Zillow.
In the spring, she adds, shoppers rush to the market and can get caught up in bidding wars.
“But by the time fall nears, sellers are feeling the pressure and are more likely to consider a price cut in order to sell their homes,” Gudell says. “And many buyers also want to be done with the home buying process by late summer so they can settle their kids in for the new school year.”
Elizabeth Convery, founder of Very Real Estate in Philadelphia, concurs, noting that many sellers hold back new listings until the start of the fall season, which generally kicks off right after Labor Day.
“This gap season in late summer is ripe for finding a deal for buyers who aren’t willing to rest. The inventory available in August generally includes homes that were put on the market in the spring and didn’t sell because they were either overpriced or the pending deal fell out of contract,” Convery says. “Sellers of these homes are eager to move them before the new inventory hits the market in the fall.”
Beth Gittleman, associate broker with New York City-based Bohemia Realty Group, says there’s an additional reason why August bodes well for would-be buyers.
“At the end of summer, people are getting in last summer vacations and, if the heat is hearty, they’re feeling less motivated to get out in the field and look at properties when staying at home in air conditioning seems more appealing,” Gittleman says.
To capitalize on this limited calendar of opportunity, experts recommend acting fast.
“Buyers should have their financial set, get pre-approved for a loan and be prepared to make an offer quickly,” Gudell says.
Enlisting the aid of a pro also is crucial.
“It’s important to engage a real estate agent from day one,” Convery says. “Someone who not only knows the market well but also can advise you on the specifics of your purchase needs.”
Keep in mind, however, that even though supply may creep up and prices creep down in August, you may not land the home of your dreams with perfect timing.
“Inventory remains limited compared with previous years, so there will still be competition from other potential buyers,” Gudell notes.
In other words, exercise patience and smart judgment. If you can’t find the right deal before autumn arrives, don’t beat yourself up about it.
“Be prepared, plan ahead, and assemble the best team you can to support the purchasing process. If you have flexibility, stay on plan and wait for something better to come along later,” Gittleman says. “If you don’t have the time or flexibility, then buy a property that doesn’t make you house poor.”
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