With the holiday season fast approaching, homebuyers and sellers are getting more curious about seasonal market conditions. Should you sell your home during the holidays? Should you buy a home during the holidays?
In this article, we’re exploring how the holiday season impacts the real estate market. We’ll tell you:
- Why market conditions are different during this special time of the year,
- Which specific market conditions change during the holidays, and
- What you can do to make the most of your transaction, whether you’re buying or selling.
Why Holiday Market Conditions Are Different
Traditionally, there are fewer real estate transactions during the holidays than during the peak summer months. Here are the primary reasons for this market slow-down:
- Most people prefer to be settled in their homes during the holidays. Not only do you want to be cozy in your home, but you also have a bigger-than-normal to-do list related to holiday festivities. So most people prefer not to move between November and January.
- The holidays fall in the middle of the school year. For families with kids, moving during the school year can be extra disruptive, particularly when moving into a new school district. For this reason, families typically prefer to move between June and August if possible.
- Fewer hours of daylight and colder weather can deter home shoppers. Thanks to the many online home shopping tools available to buyers, this is less of a consideration than it used to be. But many people still feel less motivated to make a move when it’s cold and dark out.
5 Real Estate Market Shifts Caused by the Holiday Season
Here are five key ways in which the holiday housing market is different from the rest of the year.
1. Lower Inventory
Because of the market conditions listed above, fewer sellers tend to list their homes for sale during the fall/winter seasons, particularly around the holidays. This means there are fewer homes available on the market.
For buyers, lower inventory can mean fewer options. Interestingly, fewer options can result in increased satisfaction with the process and with your chosen home. As psychologists and economists have found by studying the paradox of choice, having too many choices “actually requires more effort to choose and can leave us feeling unsatisfied with our choice.” You might not have as many homes to choose from during the holidays, but you only need one!
And for the sellers who are willing to list during the holidays, low inventory is a serious advantage. Your listing will have fewer houses to compete with. And with less competition, it will be easier for your home to stand out.
2. Lower Buyer Competition
With fewer buyers in the market during the holiday season, we find a less stressful environment for the buyers who are willing to house hunt during this slower period. Without the intense competition of a hot summer market, buyers are less likely to get into bidding wars and pay more than the asking price.
This is great news for buyers. Not only can you avoid overpaying for your new home, but you might also be able to negotiate favorable terms on the purchase. Just as importantly, with fewer people applying for home loans during the holidays, you might secure better loan terms as well.
For sellers, less buyer competition could mean lower leverage in negotiations. It depends on the balance between buyer demand and the supply of homes available. If there are more homes than buyers, and you find yourself with less leverage, you might consider incentivizing buyers to pay the full asking price by offering to use a small percentage of the proceeds to help cover some of their closing costs.
3. Potentially Lower Prices
If the buyer demand is lower than the available supply of homes, prices might temporarily dip.
For buyers, this could be a golden opportunity to get a good deal. If your local housing prices dip during the holidays, take full advantage and buy now before they likely rebound in the spring.
For sellers who find themselves in markets with short-term price decreases, just remember that selling property isn’t about optimizing (you could almost certainly make more money by selling 10 or 20 years from now, but that’s probably not practical for your current situation). Selling is about getting a fair price for your home so that you can move comfortably into the next phase of your life.
4. Longer Time On the Market
One of the most reliable seasonal housing market trends is that homes take a little longer to sell around the holidays. It’s not uncommon to see American homes taking twice as long to sell during the winter than in the summer.
This slower-moving holiday market creates lower-pressure conditions for both buyers and sellers. Cautious buyers and sellers who prefer to take a day or two to analyze an offer, rather than make a decision on the spot, may appreciate this calmer pace.
5. Potentially Faster Closings
During the summer months, when we have more transactions taking place, the whole real estate industry is busy. Home inspectors, appraisers, lenders, title reps, surveyors, and escrow officers all have a queue of clients to be serviced. This can lead to longer closing timeframes. But, around the holidays, these industry professionals are more likely to process your file faster, which can help you close the deal sooner.
This is good news for buyers and sellers alike who are anxious to get settled into their new lives as quickly as possible.
How Keller Home Loans Can Help
Whether you’re buying or selling this holiday season, Keller Home Loans is here to make your transition seamless.
Take advantage of the friendly service and competitive rates offered by Keller Home Loans and work with our innovative online platform. It’s easy to apply for your home loan, and we can work with your KW real estate agent to provide a smooth transaction.
