Sell Now or Wait for Spring?
November 15, 2017 | Buying
Articles appear every year around this time about whether it makes sense to sell a house during the winter season. The articles come largely from real estate companies and the topic is posed as a question: Should you sell your home now or wait until Spring?
The answer, perhaps a bit self-servingly, seems frequently to be that Winter is a fine time of year to be conducting a home sale.
The answer: It depends. When it comes to selling a property, there are pros and cons to every season of the year. No time of year is universally good nor bad.
Let’s face it, the time from mid-November to the end of December is busy. People spend a lot of time traveling and being guests at the homes of relatives. Or, they are on the other end of that equation – they are entertaining out of town guests. The tasks of decorating the house and shopping for holiday gifts adds to everyone’s already-busy schedule. Anyone shopping for a home in this time-frame must have some deadline driving them. They are serious and motivated to make a purchase.
There are fewer homes on the market during the winter season. In 2016, for example, there were 43.4% fewer homes on the market at the end of December than there were in July. Sellers have less competition from other sellers when marketing a home late in the year.
We can identify the number of sellers at any one time by counting all the places that are listed as “for sale”. There is no similar repository where buyers raise their hands and indicated that they are in the market right now. So, the advantage of fewer sellers may be offset by fewer buyers. It’s hard to know if the lower supply of sellers is offset by a corresponding decrease in the demand from buyers.
Home prices can show declines in November, December and January from what they were in May, June and July. Even when the overall trend is upward as it has been in metro Denver for many years now, the average home sale price in any given winter month can be a bit lower than it was just a few months early in the middle of summer.
This pattern, however, is not universal. It does not occur in every price range and can vary from neighborhood to neighborhood. Nor is the pattern predictive. Even when a given area has shown a pattern of higher spring/summer prices than winter prices for the last two or three years, the pattern may not recur next year.
Rates on home loans are historically low and have been for a long time. Predictions of looming rate increases abound … as they have for the last six years now! So far, rates have stayed down. For some perspective, a half percent increase in rate will increase the payment on a 30-year loan at $300,000 by $96 per month. Timing a sale or purchase to outwit moves in interest rates is not all that important.
Unless you are an investor, buying or selling a home before year end will probably have negligible effect on your taxes. You won’t save taxes because you hurried up and made either a sale or purchase. Most sellers of owner-occupied homes are exempt from taxes on their capital gains, while the only tax deduction gained by buyers is a small deduction of some home loan interest or closing costs.
One factor frequently overlooked in the discussion of timing of a home sale is personal preference. At CHR, we believe the best time to sell is when you need to and when it fits best with your life circumstances. We can try to outguess the market and take advantage of seasonal trends or possible imbalances in supply and demand. However, those strategies are educated guesses at best. Selling when you need to and want to and when it fits into what’s going on in your life is always a winning approach.
Selling now versus waiting till next Spring is a decision that will be different for each seller. While neither option is inherently good or bad, it’s universally true that now is an excellent time to be getting the right answer for your situation.
If personal circumstances and other considerations make it best to move forward immediately, we’re on it. We’ll make it happen. If waiting a few months makes the most sense, we can outline a game plan making any needed repairs or improvements to your property that will maximize its value when you sell next year.
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