The winter real estate market is very different than the “high season” markets of Spring and Summer. Make sure your and your clients’ strategies and expectations are in sync with a “low season” market.
1. The winter real estate market has fewer homes on this “slim pickings” market. Prepare yourself and your clients for inventories being down -9.1% according to Trulia’s latest research. Prepare yourself and your sellers for fewer lookers at open houses. (More on this in #3 below.) Also prepare yourself and your clients to expand everyone’s definition of “dream house” on a “dream block.”
2. There’s good news for starter buyers in the winter real estate market. Inventory for less expensive starter homes has increased approximately +7% during these last three months compared to the Spring market in 70 of the largest 100 metro markets. More choices and lower prices within the starter winter market represent good opportunities for buyers but…and this is a big but…there are fewer starter homes available overall, some -20% fewer, than there were compared to last year.
3. Prepare your clients for fewer people at open houses. The good news? Looker quality is higher during Q4 and Q1.. Casual lookers are not taking time away from their holiday, family and work obligations just to see “what’s available.” Those who are looking are “serious lookers” who need to find a house within a specific time framework.
4. Sellers who have listed their homes during Q4 and Q1 are motivated to sell them….and they price them accordingly. Buyers who can look past outdated interiors and/or worn out rugs/window treatments can find good homes with good bones for good prices.
5. FHA buyers may have a better chance of getting a loan during Q4 and Q1 markets. Couple this with less competition from all-cash buyers and conventional loan buyers who have larger down payment requirements and the playing field may become a bit more level.
6. Home inspections may be a bit softer during Q4 and Q1. There’s no testing of AC units during the winter and snow may preclude testing the roof. Buyers and buyers’ agents may need to pay more attention to the age of the house, the type of AC unit and the roof itself during the winter just to play it safe. Also, consult an arborist during the winter months to help assess whether or not the bare, leafless trees are healthy, dormant or dead.
7. Lastly, pay attention to interest rates. Rates have been hovering around 4% all year but the Mortgage Bankers Association predicts that the Federal Reserve will raise those rates in December 2017 and three times in 2018.