There’s no doubt that the gloomy, dark, wet weather has returned to Seattle. While everyone around Seattle retreats into the warm confines of their living rooms and local coffee shops, I’d like to offer a bit of contrarian advice for the house-shoppers out there. Seize the winter.
Winter is hands down the best time to go house hunting in Seattle, for three major reasons.
1. Less Competition
If home sales were spread evenly throughout the year, each month would see roughly 8.3% of the yearly total. Of course, anyone who has spent even a little bit of time following the real estate market knows that this is not the case. Over the last nine years, four months have consistently accounted for less than their fair share of closed sales each year: November, December, January, and February.
Keep in mind that we’re talking about closed sales, so these represent people who were house-hunting roughly a month or so earlier. In other words, if you want the least amount of competition, you should be out there looking for your next home in December or January. October and November are also good, though not quite to the same degree.
It is true that inventory also tends to decline in the winter months, giving you less selection to choose from, but sales usually decline more, as winter almost always sees the yearly highs for “months of supply” (inventory divided by sales). And less inventory isn’t necessarily a bad thing anyway, as that leads us to the second point…
2. More Motivated Sellers
How many times have you heard a hopeful seller declare as winter approaches: “I’ll just pull my house off the market for the winter and try again in the spring.” These are the kinds of houses you don’t want to buy, because the sellers are obviously not very motivated.
Typically, sellers who leave their homes on the market through the long, dark winter are those that need to sell for some reason or another, and will therefore be more likely to be willing to bargain with you.
Look for homes that have been on the market for 4-5 months in the middle of December, and you’ll probably find a highly motivated seller.
3. Easier to Spot Major Problems
In the summer, Seattle homes look great with a fresh coat of paint, the blue sky in the background providing a delightful contrast to the gleaming reflection of the sun on the bright white trim. But what you don’t see is the host of problems that may be lurking under the surface, ready to spring out the first time the rains return.
When it’s wet and rainy outside, it is far easier to spot lots of common Seattle-area house problems:
- leaky roof
- leaky basement / crawl space
- mold
- flooding / muddy yard
- poor insulation
- bad window or door seals
Buying a house is a major financial commitment beyond the mortgage, and it’s best to go into it knowing about these kinds of issues before they rear their ugly heads. House shopping in the pouring rain is a great way to help make sure you don’t miss something.
Seize the winter.
Obviously if everyone took this advice, some of the benefits of house-hunting in the winter would be lost. Fortunately for you, most people will continue to let things like school schedules and sunny skies dictate their house shopping plans, making the winter the perfect time for you to get the best house for the least amount of money.
With a higher percentage of sales happening in the summer, maybe the better quality homes, and better value, are generally listed and sold in the summer?
AMS, I think there might be a mix difference, but I wouldn’t say there’s necessarily different quality.
Two of Tim’s points are especially good. Between Thanksgiving and Xmas there is relatively little showing activity, and that makes sellers nervous. Also the water issue concern is real. During August many problems with water might not be apparent.
RE: Kary L. Krismer @ 2 – The water is a good issue. I once looked at a home in Seattle, and when I arrived there was inches of water in the basement…
RE: AMS @ 3 – Was that my listing? ;-)
I wrote about this before, but during that really heavy storm two years ago, we had one listing that we weren’t concerned at all about, because it was on a hill. Unfortunately there were about three design flaws (bad flow control from alley at driveway, bad landscaping and bad residue free gutters) which led to a lot of water forming around the house and getting into the very nicely finished basement and ruining a lot of woodwork.
Anyway, it was new construction. Sometimes tried and true is a lot better than new.
so Tim are you saying “Now is a good time to buy”?
“Look for homes that have been on the market for 4-5 months in the middle of December, and you’ll probably find a highly motivated seller.”
Maybe it’s just me, but if a house has been up for more than 90 days and hasn’t seen a big price reduction I usually think of the seller as stubborn, and trying to negotiate a probable waste of time.
I agree with your other thoughts though, especially getting to actually experience first hand the weather proofing, heating, etc.
Very true, but I don’t think *this* winter is the best time to house-hunt.
After (if) the homebuyer tax credit expires, I believe we will see Seattle house prices fall toward their final bottom, at least another 10%.
*Next* winter should be an even better time to buy.
RE: Kary L. Krismer @ 4 – In fact, it was two years ago that I looked at the property! It was December 2007, if I remember correctly. It was during that major rain.
One more comment: I know a guy who thinks that fuel prices are lower during certain periods of the year, so he stockpiles on the off season. I hear things like, “Driving Season,” “Heating Season,” blah, blah, blah. Really I cannot figure out when is the best time to buy and stockpile, which is a bit loony as far as I am concerned. I’d rather pay more at the pump than try to time the gasoline market. This guy also purchased near the peak, $4.50 per gallon, suggesting that prices were going to $6.00. I will never forget asking him how it felt to have so many gallons of gas stored when I was paying $2.50, plus or minus, at the pump.
If there were a true seasonality where bargains were to be had, it seems that investors would swoop in and extract the value.
Its always a great time to look! Who cares if there is less people or alot of people out looking. Gems pop up all times of the year. If an Agent tells you there has been alot of interest then ask….”Why hasn’t it sold?” “Apparently its priced too high?” The truth hurts. Everything sells when the property nears GEM state status.
Yes, without a doubt pouring rain does assist Buyers in finding so many problems that does NOT ordinarily appear in the summer.
Find your GEM in the coming years and avoid ALL multiple offer scenarios.
How you choose to play your hand will dictate your results. Be aggressive and make your offers according to market conditions which remain a deteriorating asset environment. Make your Agents work for you!!
By Rojo @ 5:
lol
This is great discussion. It would also help first time buyers if someone can point out what they should do to start their house hunting? Should they just start walkin to ‘For Sale’ open-houses with or without an agent? Or should they hire an agent? Any seminar\training for first time buyers out there?
RE: Anony @ 12 – This has been discussed here extensively. If you go back and read some of the history here, you’ll have a good idea of the different strategies.
I’ve been taking classes towards becoming an appraiser, and this post reminds me of one class when the instructor asked when the best time to buy a home was. Someone in the back said “Spring?” and he said “nope, between Christmas and New Years”.
By Anony @ 12:
Yes! Before we bought, we had decided to stay in the immediate neighborhood. So over the next year, we would drop in to every open house, without an agent, just to look around and get a feel for the type/quality of the house and how that related to price. As a result, when we began to shop seriously, we were able to make well informed decisions as to value. As a result, we relied less on the word of our agent. Not that we didn’t trust him, but there is no substitute for personal judgment;
I’ve found that the houses that are listed over the winter tend to be lower quality. If you’re just keeping an eye out, fine, you ought to get a better deal if you find something good. But if you’re going to commit yourself to buying “the best you can find” within a short period, the winter will offer far fewer choices.
Another downside is that if a view is part of what you value in a home, you don’t have a very good chance of seeing the mountains exposed on a winter day.
Generally I’d say, start looking in the winter but be ready to wait until April.
RE: Interloper @ 7 –
My thoughts too. Seattle area house prices are still relatively insane. What are we now, behind only NYC and SFO?
I think winter will always remain a low volume period even if people figure out that there can be better values. Many wants to do some work when they first move in, that means a lot of open doors/garages to move equipment and furniture in and out, windows for ventilation etc. Contractors going in and out with shoes on and so on. In winter this means cold drafts, excessive heating bills, a heck of a lot of dirt and potential for water damage on furniture etc and even setting yourself up for mold if you do a bit larger work which requires exposing areas to the elements. SInce prices currently aren’t really going up even in peak season it might not be worth the trouble, at least not this winter.
Cheap Homes from Tukwila to Puyallup Along the Green River
The major flooding this year causing massive valley house destruction has a 30% probability rate….
Would any of you buy now in the Green River valley, even if $400K homes went for $50K?
http://www.time.com/time/nation/article/0,8599,1926503,00.html?iid=tsmodule
RE: softwarengineer @ 19 –
You just gave me a great investment idea Softwarengineer. And I’d like my FEMA bailout money in cash please. I’m willing to buy for 50K contingent on a FEMA flood policy for full replacement cost in place at closing. I’d be prayin for rain and hoping for a total loss. It’s almost like the plot to the “Producers.” I’d imagine FEMA even prefers that I not rebuild. The worst that could happen is if it was only damaged and I had to fix a trashed and flooded house. That mess wouldn’t be worth it. But if it was totally destroyed it would probably be the best investment I ever made. Maybe I could start an investment pool like Mastro and make some money for myself even if the flood thing never pays off. Maybe call it “High Water Investments, LLC.” See you at the upcoming Green River open houses guys. Who says you can’t make money in real estate anymore.;-)
If you are working with a Real Estate agent at this time of year also ask to see expired or canceled listings that have not returned to the market.
RE: softwarengineer @ 19 – “Green River Valley, King County belongs to the National Flood Insurance Program, which means that residents cannot be turned down for flood insurance”
Yes, I’d take that for 50K.
RE: Herman @ 16 -” you don’t have a very good chance of seeing the mountains exposed on a winter day”
Isn’t your view generally better in the winter? Less leaves etc?
If the weather is clear you should be able to see through deciduous trees… but that is deceiving because there are fewer clear days in the winter and in other seasons there will be more leaves. This photo was taken from my home in the spring.
Fall and winter is the BEST time to evaluate the amount of natural light in a home on cloudy days.
“If there were a true seasonality where bargains were to be had, it seems that investors would swoop in and extract the value. ‘
But you can usually find some great bargains on parkas and sweaters in May, and shorts in November…
It is true that houses look less appealing in the winter, especially around here. People don’t want to go house hunting when it’s 38 degrees out and raining, and those listing photos of the trees flowering and sun shining don’t look anything like the house with the gray skies and lifeless branches.
RE: Interloper @ 7 –
Trying to catch the EXACT bottom of the market rebound is never smart, either. Chances are that the rebound could be a fake rebound and you are trying to catch a falling knife. Be safe and buy back in when the market is obviously in a long-term upswing. A sidways market is not good to invest in, either, as you are paying large amounts of mortgage debt without receiving compounded interest on that money. Better to RENT in a sideways market and put your money into short-term CDs that have high yields.
By TAco @ 26:
And what CDs are those? I can’t find much better than 2%.