The short days and cold temperatures of winter practically beg you to huddle in your house where Netflix and comfort food will keep you safe and warm. But going into hibernation means you'll sleep on some of the best housing deals you'll find all year according to Kathy Cummings, a housing expert with Bank of America. "Purchasing a home between September and December can be an advantage to buyers compared to purchasing in the spring or summer," she said. "Understanding how the time of year will affect home prices is an important piece to the home buying puzzle."
All real estate is local, but the broad numbers indicate that when the leaves turn gold and your Instagram is filled with people sipping their PSLs, bargain hunters should start gearing up for purchasing a home. A 2016 study from Realtor.com looking at more than a decade's worth of home sales found deals closed in October at 2.6% below the estimated market value, meaning a buyer could save $6,500 on a $250,000 by purchasing when Halloween looms on the horizon rather than Memorial Day.
Why colder temperatures mean lower prices
The reason home prices tend to drop with the thermostat has less to do with sellers getting into the holiday spirit and more to do with their eagerness to finally find a buyer. Most of the homes available during fall and winter have survived the glut of buyers from spring and summer, meaning buyers in the mood to negotiate will likely find a receptive audience among sellers who want to move on (and move out).
Other reasons buyers should consider purchasing during the fall and winter include:
Less competition from parents
Parents tend to avoid disrupting their school-aged children's routine by a move, particularly if they’re planning on moving to a new school district where their child would have to figure out the lunch table situation in the cafeteria in the middle of the school year. These buyers will mostly vanish from the market by the time school starts in September, meaning their desperation for a home won't drive up prices. "Buyers save when they don’t have to engage in bidding wars since the competition will have tapered down," Cummings said.
Being able to afford that "reach" neighborhood
Because winter brings lower prices, that perfect—but unaffordable—neighborhood may finally be within your budget. Buyers placing a premium on which school district the house is located in or how far away it is from the only grocery store with the good avocados should keep an eye on listings during the colder months to see if a property pops up in their price range.
Claiming tax advantages when April rolls around
Do phrases like "mortgage interest deductible" and "property taxes" cause your eyes to light up? Probably not, but they should since closing on a house before the end of the calendar year allows you to deduct points on your mortgage loan, mortgage interest and property taxes on your taxes come April (though you should always consult a tax professional to see how it affects your individual finances).