June 18, 2021
Buying a house in winter has significant advantages. And if you're wondering, "Are houses cheaper in the winter?" Yes, in most places they are. But every location is different as far as the weather is concerned. And the wind, rain, and snow can put a damper on sales. But certain things — like not wanting to move during the holiday season remain constant no matter where you live. Read on to discover our top tips for buying a home during December, January, and February.
Winter — Best Time of Year to Buy a Home
If you live in a location that has a strong market in every season, winter could be the best time to buy. That's because there are fewer people shopping. To set yourself apart, here are our two top winter home buying tips:
- Be willing to move during the holidays. Many home shoppers won't move during December because they want to have Christmas in their homes. That flexibility could put you ahead of other offers.
- Have your financing in order with a good earnest money deposit. And make sure you choose a lender that does a thorough pre-qualification. That way, you'll know you have a good chance of final loan approval.
Do home prices go down in winter?
Historically, prices do go down in winter. Sellers who weren't able to sell during the peak seasons are now more motivated. A home that's been sitting on the market for a few months might deserve consideration. Some homes that are dated or have some slight deferred maintenance could be a good deal.
But, before you consider buying fixer-uppers, make sure the type of mortgage you're getting will allow it. FHA loans for the most part won't work unless the deferred maintenance is fixed before the loan closes. Cosmetic fixers can be fine as long as there are no major issues like dry rot or roof problems.
When interviewing real estate agents, test their knowledge of local market conditions. Ask them, "How much do home prices drop in the winter?" If they're familiar with the area, they'll have a wealth of knowledge. Choosing an established realtor with connections is smart. If there are any deals out there — they'll find them.
Is December a good time to buy a house?
December real estate inventory is most likely the lowest of the year, but don't feel that you have to wait to buy until spring. Even though there are fewer homes, there are also fewer buyers. Although most sellers try to avoid closing around Christmas, some don't have a choice. Maybe they're being deployed or transferred. In that case, be flexible on the close date and work with the seller.
December is one of the better months for finding a home below market value. Most people are distracted by the holidays, so they've put home shopping on the back burner. But that doesn't mean there aren't motivated sellers. Over the past few years with low interest rates spurring the market on, January is fast becoming the new spring. With the real estate market continuing to boom, sellers and buyers want to get a jump on the season. So be on the lookout for new listings every day. Every location is different so it's a good idea to ask your real estate agent, "When does the housing market pick up?"
Buying a House in January or February
Right after Christmas and New Year's, January and February can be excellent months for home buying. These are the best months to find deals. With fewer buyers looking, sellers are willing and even eager in some cases to lower their price or do some requested repairs.
If rates remain low that can improve shopping even more. Additionally, real estate agents, lenders, inspectors, and appraisers are rested and rejuvenated from the holidays. Everyone is ready to return to work. That means the entire process can go much smoother than in the hectic spring and summer months.
Even if the weather isn't the best, motivated buyers are willing to get out there and view homes. They know the busy time is coming in spring so this could be their best chance to buy a home.
There are other advantages of viewing a home in less than sunny weather. You'll get a good idea of how comfortable the interior is in the winter and if there are any noticeable leaks in the roof by looking at the ceiling.
One disadvantage of buying in the winter is that you won't know what the trees, landscaping, or grass look like in the warmer months.
Winter is a Hot Real Estate Market — In Some States
You've heard the saying that location matters. That's especially true when it comes to winter home shopping. Some states with freezing temperatures see the real estate market come to almost a halt. Where other warm-weather states like California and Florida see strong sales through the winter months. Let's see how the different regions of the country fare in wintertime.
- Just like in the previous fall months, the southern states have the strongest winter real estate selling season. This region includes the warmer states of Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. It's not surprising especially in Florida where snowbirds come down from the freezing states of New York, Connecticut, and New Jersey to warm up, enjoy the sun, and shop for homes.
- Coming in second for the strongest winter real estate season are the western states of Montana, Wyoming, Colorado, New Mexico, Idaho, Utah, Arizona, and Nevada. Also included are the pacific states of Washington, Oregon, California, Alaska, and Hawaii. There are some warm-weather states here where real estate shopping is enjoyable even in the winter.
- Midwest states of North Dakota, Kentucky, Wisconsin, Ohio, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, and Nebraska come in third place. It's not surprising home sales slump with their cold winters.
- Northeast states of Maine, New York, New Jersey, Vermont, Massachusetts, Rhode Island, Connecticut, New Hampshire, and Pennsylvania come in fourth place. Very few homebuyers are willing to shovel the driveway to go look at a house.