Buying or Selling a Home in Winter: What You Need to KnowDec. 11, 2020 | Written by: Lori Fox & Dave Ramsey
Buying or Selling a Home in Winter:
What You Need to Know
Nobody buys or sells a home in the winter. Right? Wrong! In fact, if you checked the numbers, you’d find that a good chunk of home purchases happen during the coldest months of the year. Besides, many southern regions aren’t all that affected by the change in seasons. But even if you live up north, homes are still getting bought and sold despite icy roads and snow-covered roofs.
For us nerds who want the stats, over a million homes were sold in the U.S. last winter (1.086 million, to be exact, from December 2019 to February 2020). Sure, over half a million more than that were sold in the summer months of 2020.1 But still, the amount of homes that are bought and sold in the winter is nothing to sneeze at.
So, if you’re wondering if you should put off buying or selling a home until spring, why wait? You may be surprised to learn that there are actually advantages to buying or selling while Jack Frost is nipping at your nose.
What are the advantages? You’re about to find out!
Selling a Home in Winter
Okay, huddle up, home sellers. Let’s unpack the perks of selling when the air gets chilly.
The Internet Has No Seasons
You probably already know that most buyers go online to search for homes, no matter what the temperature is outside. In fact, nearly all buyers (93%) used the internet during their home search last year. This instant access to property listings has had an impact on the typical seasons buyers look for homes.
While spring is still the hottest home-buying season, serious home buyers are always on the lookout—checking the latest listings on their tablet before bed or while waiting for their kids' hockey game to end. So even though the weather may be changing, it won’t stop home buyers from shopping.
Come spring, other sellers will flood the market and your home will be just another fish in a great big pond. But in winter, you’ve got a limited number of sellers on the market. For perspective, 250,000 homes for sale dropped off the market from November to December in 2019—the steepest drop all year!3
If that pattern repeats this year, you’ll have 15% less competition on the market if you list your home during the winter! Buyers have fewer homes to choose from, which means you could sell your house faster.
Buyers Mean Business
Most folks want to curl up under a blanket next to a warm fire on a cold winter day. If a buyer is trudging around in freezing weather or breaking away from their holiday schedule to look at your home, they must be serious. That’s because many winter buyers are working against a deadline, whether it’s an expiring lease, relocation, or a contract on their current home.
You may think people are less likely to see your home in the midst of their hectic holiday schedules. That can definitely be true. But keep in mind, most people also have more time off around the holidays. That means more time for browsing their favorite home apps, dreaming about their future decor, and even scheduling home showings.
Getting Tax Breaks Before Year-End
Winter home buyers may also be motivated to capture the tax benefits of buying a home before year-end. Home buyers can write off some of the expenses of their home purchase on their taxes. There are usually multiple tax benefits of owning a home they can take advantage of too. Typically, a homeowner can count on the following being tax-deductible:
Private mortgage insurance (PMI) premiums
Real estate taxes
All of these tax benefits could make a potential home buyer want to get a house bought and closed before the new year. And if you’re selling your home and buying another, you could ring in the new year with more tax breaks too!
Tips for Selling in the Winter
Nothing says welcome home quite like walking out of the cold into a nice, warm house. It’s easier to make a house feel like home in the wintertime. Here are a few tips to help you set the buying mood:
Keep it simple. If you’re selling around a holiday and have decorations up, make sure they accent—not overpower—a room. Less is more.
Crank up the cozy. Light a fire in the hearth, play soft holiday music in the background, and prepare fresh-baked goods or mulled cider for guests.
Shine a light outside. Winter days get dark early. Brighten your home’s exterior with outdoor spotlights.
Take down outside decor. Nothing says “my home won’t sell” like a house with reindeer inflatables on the lawn in February.
Avoid a winter wonderland. Snow is great, unless we’re talking about outside shots of your home. Buyers want to see details of the house, not a blanket of snow. Make sure you have clear-weather photos of your home.
Remember, the nicer your home looks, the more likely it is to sell—and for more money.
Buying a Home in Winter
Alright, home buyers. Now it’s your turn. Below are the benefits of buying a house when the weather outside is frightful.
Okay, we already established that home sales take a plunge during the winter. So, typically, you won’t have to deal with as many competing buyers as you would if you waited to buy in spring. Which probably means you don’t have to worry as much about someone else snagging your dream home before you can submit an offer, or about getting caught in a bidding war. It’s kind of like when someone brings in holiday treats to share with the office, but most of your coworkers are out of town. You get first dibs on the best desserts!
Since supply and demand for housing are both down during the winter months, you might be able to save money on your purchase! Hard to believe? Well, last year, the median sales price of homes sold from December through February was around 5% lower than homes sold from March through May.4
That means people who bought their homes during winter saved tens of thousands of dollars compared to those who bought in spring! That might make any challenges of buying during the wintertime worthwhile.
Mortgage Rate Fluctuations
If you’re getting a mortgage, you might be able to lock in a good interest rate before the new year hits. Having a lower interest rate would save you money as you work to pay off your new home. But keep in mind, interest rates don’t always go up. So check local lenders to learn more about the status of current interest rates.
Witness the Home’s Durability
House hunting in winter gives you a chance to see how your potential new home handles harsh weather. Sure, moving to a new home during the spring and summer is probably a lot easier than when you have to bundle up and deal with icy roads. But suppose you fall in love with a house even with the weather at its worst. Then you can be confident that living there will only get better from here on out!
Tips for Buying in the Winter
Okay, here are a few tips to be extra-ready for buying a home in winter:
Stick to your budget. Sure, home prices might drop a bit with the temperatures. But that doesn’t mean you should justify spending any more than 25% of your take-home pay on monthly housing payments. To make sure your winter home purchase is a blessing and not a curse, calculate how much house you can afford and stick to it.
Negotiate with confidence. Remember, there isn’t much competition. So, sellers will probably be willing to work with you. If the home inspection brings up some issues, don’t be afraid to ask your seller to make repairs or lower the asking price.
Prepare for tax changes. Buying a house can complicate your tax situation, which is why it’s always a great idea to connect with a tax expert for knowledge. They can make sure you get every deduction and credit you’ve earned.
If you follow these tips, there’s hope you’ll find the house you want and get a good price in the winter.
Are You Ready to Buy or Sell Your Home in Winter?
With all these advantages on your side, hopefully buying or selling your home in the winter won’t feel so daunting. We know you’ve probably got a lot on your plate this time of year though, I'm here to help. Contact me today with any questions on the home buying/selling process.