It’s only October and some homebuyers are telling us they are planning to hibernate until next spring.
Just because the temperatures have reached into the chilly mid 80’s doesn’t mean if your plans include buying a home you should break out your sweaters and wait until April to buy a home.
For the last 3 years I’ve noticed a trend. Buyers who have a lease expiring in March/April will begin looking for a home the summer before.
They like to tell me “We’re not in a hurry” when I meet them at an open house.
What they don’t realize is they should be in a hurry.
Each year around March when they get serious about buying a home the prices are substantially higher. What most consumers don’t realize is real estate prices don’t increase in a linear fashion. The supply/demand ratios tilt even more in favor of home sellers in the spring. For the last 3 years we have seen significant increases early in the year.
Many of the same people who told me they weren’t in a hurry the year before suddenly become paralyzed because the house they could have bought for $320,000 is now listed for $350,000 in the spring. This sets up a cycle of indecision because those people now are convinced the higher prices are a bubble and the market is going to crash. They hold off for another year which has not been a good financial decision in addition to their family living in an apartment for another year.
We haven’t seen the market crash and I don’t expect to see lower prices next year. Especially in the first time homebuyer price range it seems like we are seeing even more people saying they are going to wait until spring next year. Because of that I expect home prices to be higher at the beginning of 2017.
The advice we give our clients is the great homes don’t come on the market as if they are on a train schedule. If we find a floor plan that works and the price is right it’s better to buy that home even if the timing isn’t ideal.
If I were planning to sell and move up to a more expensive home I would sell now and take advantage of the lower prices on the move up home even if that meant not selling in the spring market.
Personally I believe there will be some better deals heading into fall/winter this year and then higher prices next spring. In particular there will be good deals on builder close outs as we approach December.