As the year winds down and temperatures drop, the real estate market is seeing some notable changes. Mortgage rates have recently peaked at 7.23% and remain close at 7.19% as of late September. Meanwhile, July’s home sales saw a decline of 2.2% year-over-year, marking a cooling trend across all U.S. regions. In addition to high mortgage rates, the overall housing market has been impacted by elevated home prices, limited housing inventory, high inflation, and the specter of additional interest rate hikes. However, it’s not all bad news.
While the holiday season has traditionally been a time of additional market slowdowns, it can also create some unique opportunities. Understanding seasonal trends can help real estate agents thrive during the last quarter of the year and potentially create exciting benefits for their clients. Here’s a look at what you can expect as 2023 comes to an end.
1. Decrease in Demand
As the festive season approaches, many people turn their focus to settling down in their current homes and celebrating the holidays. This typically leads to a combination of fewer new listings and a smaller pool of interested buyers.
However, the holiday season can present unique advantages for real estate agents and their clients. The reduced number of listings means less competition for sellers, which could lead to quicker sales at favorable prices. Buyers willing to shop during the holidays could also find themselves with a stronger negotiating position and fewer competing offers.
With fewer realtors and mortgage lenders operating at full tilt, active agents can also enhance their client experiences by providing additional availability and personal attention. In a market where personal connection often dictates success, the holiday season can be a golden opportunity. Clients will likely appreciate the extra dedication and responsiveness, leading to increased trust and, potentially, more referrals in the future. When other professionals step back for the holidays, proactive agents can step forward, making a lasting impression that can benefit your business year-round.
2. Motivated Buyers and Sellers
The holiday season also sees a notable shift in buyer and seller demographics. Buyers and sellers who are actively pursuing real estate transactions during the holidays are typically highly motivated. Often, these individuals are making a move because they have to – a new job is forcing a relocation that can’t wait, a buyer lives in a one-bedroom home and just found out they’re having triplets, or some other major life factor is preventing them from waiting until after the festive season has passed.
Understanding your client’s motivations can help you better cater to their needs. Since both parties are likely eager to settle the deal more quickly, transactions may be both smoother and faster. Real estate agents can leverage this sense of urgency to negotiate favorable terms for their clients on either the buyer or seller side.
3. Investment Opportunities
Real estate investors rarely clock out during the holiday season. They’re on the hunt for the best deals and highly motivated sellers all year long. For agents, the slower months can be the perfect time to connect with local investors.
Remember that these pros value time, so when you reach out, keep your communication concise and to the point. Be prepared to present lucrative deals and make sure you’ve sharpened the skills necessary to work with investor clients.
4. Higher Demand for Digital Marketing and Virtual Tours
There was a time when the holiday season meant a pause in business activities, but in today’s digital world, people are often working right up until the holiday arrives and rarely “go off the grid.” Now, even during the festive season, potential buyers are often just a click away from their dream homes. Busy holiday schedules and potential travel might deter in-person visits, but this doesn’t mean interested parties aren’t on the lookout.
Virtual tours have become an extremely valuable tool for real estate agents, especially during the holidays. They offer a convenient way for potential buyers to view properties from the comfort of their own homes or while traveling. It’s also likely that people will be spending extra hours online during holiday downtime, creating a prime opportunity for agents to engage them with virtual open houses or digital ads.
Platforms and apps have made house hunting a 24/7 activity, ensuring there’s never truly a “downtime” in the real estate market. By embracing these digital tools, you can make sure your listings remain front and center even during the holiday hustle and bustle.
5. Price Adjustments and Negotiations
The decreased activity that occurs during the holiday season can create subtle shifts in the real estate market’s dynamics. Homes may remain on the market for longer, potentially making sellers more willing to consider price adjustments. For buyers, this translates to potential bargains and increased room for negotiation. Astute agents can capitalize on this trend by securing favorable terms and prices for their clients, turning a slow market into one that’s extremely beneficial for their buyers.
It’s also important to note that the slower market doesn’t have to spell doom for sellers. Agents equipped with up-to-date market insights and data can provide their clients with strategic pricing guidance. A well-informed price adjustment, or a special holiday incentive, might be just the nudge holiday shoppers need to make a purchase.
6. Potential Year-End Financial Benefits
As the clock ticks down to the end of the year, buyers may have additional incentives to finalize their real estate transactions. For some, making a purchase before the year ends can yield financial benefits, particularly when it comes to taxes. Buyers may be able to deduct certain expenses like property taxes, mortgage interest, and points paid upon closing.
It’s also notable that historically, interest rates tend to drop during the holiday season. While interest rate fluctuations are dependent on a variety of factors, the decrease in demand around this time can sometimes prompt lenders to offer more favorable terms to incentivize purchases. As a real estate agent, you may be able to highlight these potential advantages, using them to motivate buyers and sellers to close their deals before the new year.
How Keller Home Loans Can Help
As you navigate through the unique challenges and opportunities the holiday season brings to the real estate market, having a reliable and knowledgeable financial partner can make all the difference. At Keller Home Loans, we are dedicated to providing tailored solutions that meet your clients’ needs, ensuring smooth transactions even during the hectic holiday season.
Our experienced team is here to help your clients with all of their mortgage lending needs. Contact us today to learn more.