I wrote a little bit last week about “the biggest challenge” a person might encounter in 2015, detailing some of my own personal challenges/concerns in the process. One of them was about the whole notion of buying a home — that’s something that’s on my radar, for sure, although I doubt it ends up happening in 2015. (Still too new to my job and don’t have friends in Fort Worth yet, plus don’t know about kids — all that stuff mentioned on the link above.) When I see articles about home-buying, though, I’m still interested because it’s generally something I’ve considered. Here’s a doozy of some context that I found.
Check out this article, and, specifically, this chart:
Basically, buy a house in the winter as opposed to the summer.
There’s some stuff you need to know around that, though — detailed in Slate years ago and recently detailed in a new economics paper. Basically, the question is why home prices seem much lower in the winter as opposed to the summer.
One postulation has long been that people with school-aged children, who might be shopping for a home, prefer to do that shopping in the summer (less things going on with their kids and school). That makes sense on surface, but some of the research above indicates that only 1/3 of prospective home buyers at any given time have school-aged children (that seems low, but what do I know?). So it’s probably not that.
You could say, “Well, people probably want to buy homes in the summer because it’s nicer to look at properties when the weather is better.” Again, this makes sense — but in cities where there isn’t a huge difference between summer and winter, like San Diego, the prices can still vary.
The real reason, via one of the paper’s authors, is probably a snowball effect:
“Because there is this critical mass that prefers searching in the summer, then sellers put their houses on sale in the summer,” Tenreyro says. “And because there are more houses for sale, then other buyers also then prefer to search in the summer and so on and so forth. The effect gets amplified as a virtuous circle.” In this way, the unique preferences of a relatively smaller group of home buyers ends up dictating the market for everyone else.
It is true that people who move into their homes in the summer tend to like them more and stay longer — this is probably because the choice is wider, so you can find something that closely aligns with what you want, whereas searching in the winter is akin to bargain-shopping — but if you want to save a few bucks (which is relevant for the next generation coming up), consider searching/buying in winter. (Makes note to self.)