Here’s a stats-based look at why winter is the best time of year to buy a home.

Just a few weeks ago, I was out with a client at a home he was looking to purchase; he had been reading headlines and getting some information from friends via Facebook, and he basically said, “Hey, I don’t know if now is the right time to be buying a home. Shouldn’t I be waiting until after the holidays?” 

His belief that there’s usually few if any people willing to sell during this time of year is a common one, so I wanted to address it today. Ultimately, there is no “best time” to buy—the only time to buy is whenever it works best for you and your specific situation. However, if you have the flexibility and can plan your move so as to get the best price from your purchase in the market, then there are a few things you’ll want to keep in mind. 

You may have heard a few Realtors claim that winter is the best time to buy, but there is seldom a statistic offered to back this up. That doesn’t mean the idea itself is wrong, though. Winter is the best time to buy because most people just naturally assume that everyone else will be busy with the holidays and that no one will be thinking about moving at all. True, a lot of buyers and sellers do fall out of the market in wintertime, but the data shows that wintertime buyers have the best chance of making the most out of their home purchase as far as equity is concerned.

“People making a move in the winter are doing so because they have a very strong motivation in their life.”

Let’s look at two key metrics to help us understand why that is: 1) the total active listings on the market at any given point throughout the year, and 2) the average list-to-sale price ratio of listings sold during those months. In case you’re unfamiliar with that latter metric, let’s say you were selling a home for $100,000 (for easy math); if you ended up selling the home for $95,000, then your list-to-sale price ratio would be 95%. 

At 2:48 in the video above, you can see a graph displaying the number of active listings that were on the market during December for the past three years—this will be our baseline. The total number of listings isn’t what’s important; it’s the trend they help reveal that matters most. Normally, the number of listings that come onto the market tends to rise in the middle of the year and fall toward the end of it, creating a loose bell curve; in fact, in December, you’ll actually notice that this number reaches its absolute low point. Of course, that means the number of options for homebuyers is lower, but it also means that the number of people out there looking to buy a home is much lower. 

Now it’s time to revisit that average list-to-sale price ratio. The most important thing to note is that, as the number of active listings drops in the wintertime, the list-to-sale price ratio goes down as well. 

Again, we’re simply using data to make the point that winter is the best to buy a home if you’re looking to make the most in terms of equity on the purchase. That said, we also know that real estate is an emotional purchase—it’s not some stone-cold business deal.  So, you have to also keep in mind that the people who are looking to sell and buy a home in the winter are doing so because they have a very strong motivation in their life (a job offer, a newborn baby, etc.). Make sure that you work with an experienced real estate agent to put together as compelling an offer as possible when you do find the right home. 

I hope you found value in this blog. If you have additional questions regarding this or any other real estate topic, reach out via phone or email; I’d love the opportunity to chat with you. Don’t forget to like and share this video!