When’s the Best Time to Buy or Sell Your Home?

For most of us, real estate transactions are among the most significant in our lifetimes. They have outsized influences on our net worth and finances, inform where we spend our day to day, have enormous tax implications, and can set the trajectory—for better or for worse—for our future. Understandably, we want to do all we can to ensure we’re not just making the right decision, but making it at the right time.

So, when is the best time to purchase a house? How about selling one? Timing the market is rarely advisable, but historical trends and other data can help you make an informed decision. Below, see some of the guidance that the real estate aficionados at Liberty Home Guard put together.

Understanding the Real Estate Market Cycle

Before you can determine the best time of year to buy a house—or sell one-–you need to understand the patterns that the real estate market tends to follow. 

There is, of course, the broader real estate cycle that is usually closely aligned with that of the greater economy. In periods of economic expansion, the housing stock may grow. Developers engage in more new construction, more speculators seek to invest in real estate, and home prices typically appreciate, favoring sellers.

Unabated, real estate expansion can lead to an oversupply of housing stock. Vacancy rates tick up, home prices slip, and now buyers may have the upper hand.

A period of economic contraction or even a recession may follow, and then there is a recovery phase before the cycle repeats.

This explanation oversimplifies an exceedingly complex process, and the cycle isn’t always so neat—and it’s rarely predictable. Short of a crystal ball, there’s no way of telling how long or severe an economic contraction will be, and no way of knowing how high home prices will go or how far they will fall. Real estate markets will also exhibit differences from place to place, so one state, city, or even neighborhood can experience a hot market while those elsewhere stay relatively stable.

Still, it behooves home buyers and sellers alike to be aware of these general economic trends. Broadly speaking, it’s a good idea to investigate buying a home in contractionary periods, while you can likely find the greatest price on a home sale during an expansion. If market circumstances favor your situation in the moment, strike while the iron is hot. Otherwise, consider sitting tight, if possible, until you stand more to gain.

Bear in mind that the housing market often follows a rough annual cycle as well. There are a number of factors that contribute, such as:

• Weather and daylight hours

• School district calendars

• Landscaping and curb appeal when vegetation is lush

• Holidays and vacation trends

• Tax season

• Seasonable effects on construction and home service professions

These realities mean that, statistically, late spring and summer is the most active time for real estate. Competition for home buyers ramps up around April or May and continues until August or September. Houses might command slightly higher prices during these months as well.

Again, these are general trends. Market circumstances can vary from year to year, there can be anomalous seasons of buying or selling, and situations can and do vary by region. But trends are helpful to keep in my mind as you endeavor to buy or sell a home.

The Optimal Season for Home Purchase 

Is summer a good time to buy a house? Or is buying a house in the winter or fall a more advisable strategy? 

Buying a home, it goes without saying, is a significant financial decision, and you should do all the research you can to ensure you are making the most informed decision possible. You should keep in mind the prevailing economic trends, both of the housing market and broader economy. Assess your and your family’s needs and financial wellbeing and determine if owning or renting makes more sense at this point in time. 

If you do foresee yourself buying a new home in the next 12 months, the late fall and winter months—statistically-–are most favorable. As a home buyer, what you stand to gain is outlined below.

Benefits of Buying a Home in the Fall or Winter

The real estate market is most active in the late spring and summer, which typically means more potential homes to choose frome, but by and large the fall and winter months put the housing market on the buyer’s side. Here are some of the pros to consider:

• Fewer Competitors A sleepier market means fewer buyers looking for homes. There won’t be as many competing buyers jockeying for the same home, so you’re less likely to be outbid by someone offering a higher price or more cash.

• Better Service In the off season, home professionals of all trades and fields might be more likely to provide more attentive and personalized service because they have fewer customers to accommodate. Your real estate agent, title agent, home inspector, and bank rep could be easier to get a hold of because they have less on their plates.

• Expedited Transaction Similarly, because interested parties are less busy than they might be in the spring and summer, you may have less time to wait before the keys to your new home are in your hands.

• Seasonable Inspection A good home inspector is thorough, and can advise even in the summer months on the energy efficiency—or inefficiency—of a home. But drafty doors, poorly sealed windows, inefficient heating appliances and systems, and poor insulation could be easier to identify in the winter when it is actually cold.

• Cost Savings You might find more opportunities to save in the fall and winter when it comes to moving costs and home furnishings. Some services may offer off-season deals, and you can take advantage of end-of-year sales to buy new furniture and appliances for your new home.

• Lower Prices Notably, you might be able to score a better deal on a home if you purchase in the fall or winter. We have more information for the reasons behind this in the section below.

Motivated Sellers, Better Deals

Is winter a good time to buy a house? Yes… But a good time to sell? Not necessarily. Home sellers often have a harder time selling their homes in the fall and winter months. The market slows down and there is a smaller pool of buyers to connect with.

As a result, home sellers are more likely to take steps to make their homes more enticing to buyers if they need to sell sometime between October and March. They might agree to cover some of the costs associated with the inspection or closing, or include a transferable home warranty to give the new homeowners a window in which their home systems and appliances are protected from wear and tear.

A winter buyer’s market can also mean that sellers are in less of a position to negotiate home prices, and buyers can more confidently bid below asking price.

Tax Advantages Before Year-End

From a tax perspective, is December a good time to buy a house? It depends. There usually isn’t harm in doing so, but there’s not necessarily tremendous benefit either. Some homeowners investigate itemized deductions so that some home expenses, such as property tax or mortgage interest, can be used to lessen the year-end tax burden. But for a first-time buyer closing in December, this probably isn’t very significant.

In the past—and maybe future—there were tax credits for certain home buyers, and other programs might incentivize buyers from state to state. But by and large you should let your life circumstances and whether or not you can find a reliable home at a good price inform your decision to purchase at year’s end.

What Are the Cons of Buying a Home in the Fall or Winter?

There are some minor inconveniences when it comes to shopping for a home in the winter. The shorter days, for instance, mean you have a very limited window in which you can view a home in the sunlight. And sparse winter vegetation forces you to make use of your imagination to envision how the home might appear when the landscaping is lush and in bloom.

But really the primary con of shopping for a home in the colder months is the more limited stock. Yes, less activity in the real estate market means you have less competition and can negotiate a better deal with a home seller, but it also means that there are fewer homes to choose from. 

There may be some personal considerations as well. Moving in December or January means relocating in the middle of the school year, which might not be ideal if you have school-age children.

When Is the Best Time of Year to Sell a Home?

Some of the advantages that buyers enjoy in the off season translate to sellers as well. Home sellers may also experience more attentive agents or personalized experiences. But some of the buyer’s benefits are at the seller’s expense. Because there are few prospective buyers in the fall and winter, home sellers may find themselves settling for lower offers than they would expect to see in the spring or summer.

Sometimes life leaves you no choice, and you need to sell your home as quickly as possible. And you have to consider, of course, broader economic circumstances. But, generally speaking, if you want to sell your home but can hold off until the middle of the year, you are more likely to secure a better price.

When Is the Best Time to Add a Home Warranty?

The optimal time to invest in a home warranty depends on whether you are a home buyer or seller.

If you’re selling your home, you should consider purchasing a home warranty that you can transfer to the buyer after the closing. Home warranties have a history of incentivizing buyers and increasing home values.

Buyers should look into a home warranty immediately after closing. Even with a thorough inspection, it will take you time to become acquainted with all of the systems and appliances in your new home. A home warranty will provide some protection and peace of mind in case your water heater, or oven, or air handler, or some other piece of equipment malfunctions shortly after you have moved in. 

But regardless of whether you’re a buyer or seller, let Liberty Home Guard supply you with a home warranty tailored to your home and circumstances. Our plans offer remarkable benefits no matter which side of the real estate transaction you’re on, and our suite of coverage options for appliances, systems, fixtures, and home services will give you the robust coverage you won’t find anywhere else. Call (866)-700-5422.