As we move towards the holidays, buyers in the market for a new home often face a dilemma: buy a new home before the year wraps or wait until the new year rings in? Both options have their perks and pitfalls, however, there is one thing that I am seeing nagging at potential buyers these days: the unpredictable nature of the real estate market.
Market unpredictability is influenced by a lot of things, such as economic data that can send mortgage interest rates up or down. Will interest rates drop in the coming year, possibly causing home prices to shoot up? Or will persistent inflation push us back into a time of rising interest rates? No one knows for certain.
Deciding whether to dive into homeownership in December will depend on buyer’s priorities and individual circumstances. Here is some good news for today’s buyers: prices have taken a dip – with about 20% off from the peak of 2022.
Advantages of Buying in December
Motivated Sellers
Sellers who are eager to close deals before the holidays may be more motivated to negotiate and compromise on price and terms, offering buyers a chance to secure a better deal.
Less Competition
December sees a slowdown in the real estate market due to holiday focus, resulting in lower inventory and less competition among buyers. With fewer bidders, buyers have more negotiating power and an increased likelihood of accepted offers. However, post-New Year, there’s a higher chance of bidding wars.
Potential Discounts
Sellers may be open to offering incentives to close deals quickly. If a property has lingered on the market for over 30 days, sellers may be more willing to lower the price or include perks to attract a buyer before the year ends.
Advantages of Waiting Until After the New Year
Increased Inventory
After the new year, the real estate market tends to pick up, leading to a surge in new listings. Waiting until January provides buyers with a broader selection of homes, increasing the chances of finding a property that meets their specific needs.
Opportunity for Price Reductions
Sellers who struggled to sell their homes during the holidays may become more motivated to negotiate and reduce prices in the new year if they continue to see low traffic.
Less Hectic Schedule
After the holiday rush, both buyers and sellers have more time and attention to dedicate to the home-buying process, fostering smoother transactions, clearer communication, and a more straightforward closing process.
In a nutshell, deciding to buy a home in December or holding off until after the new year depends on what matters most to you. Buying in December will more likely get you a better deal on a home that is already on the market. On the flip side, waiting until after the new year means more homes to pick from, but you might face tougher competition and a less predictable market.