The truth about the best time to buy a home

Ask a real estate agent about the best time to buy a home, the answer will inevitably be “Now!”

Why? Because prices are about to go up. They always are “about to” go up.

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Interestingly, when it comes to selling your home, you’ll get a slightly different response to a question about timing. Maybe the market is soft and you should lower your asking price. Maybe you just missed your window to sell.

So, which is it? The truth may seem complicated, and it can be, because it depends on the real estate market, the time of year, the region, the neighborhood you’re buying in, and, of course, the home.

That’s a lot of variables, way too many to thoughtfully analyze in a single story, right? Well, no. It turns out that even when you take all of that into account, there are still better and worse times to buy, generally speaking.

There’s a simple and reliable way to gauge the market. The Case-Shiller Home Price Index, for example, will tell you where prices are really going. You can drill down by metro area, but for a more detailed view, check out Zillow’s market reports. Here’s one for my area in Prescott, Ariz. (Uh-oh, better sell the ranch soon.)

Beyond that, there are seasonal variables that even real estate professionals will happily tell you about. Just don’t ask them about your house.

Buy when no one else goes shopping
“The month of December is the ideal time to purchase a property,” says Jeff Miller, co-founder of AE Home Group, a team of local Maryland real estate agents who help buyers and sellers navigate the Baltimore real estate market. “Sellers leave the market in droves when the holiday season comes around. Nobody wants to organize their lives around showings when they’re busy preparing for out-of-town family visitors and hosting annual parties.” If you’re a buyer, you know that someone marketing their home during the holidays is highly motivated, he says. In other words, they’re probably more willing to take a lower price, flexible buyer terms, or work on a condensed or extended closing schedule.

Buy during traditional “season”
That would be late spring through August in most markets, says Kathryn Bishop, a realtor with Keller Williams in Studio City, Calif. Why? “Because families want to live in a specific neighborhood for the schools,” she says. “This time period usually has the most selection.” However, by summer the prices also tend to peak. So while you may find an excellent selection, you’ll also find the most buyers and highest prices. For a better deal, try shopping for a new home in November, December and January, when school is in session, she says.

Avoid the “mistake” season
That would be March and April, say experts. “Spring is when people are out milling around and not necessarily going to buy,” says Marcia Goodman, a real estate agent with Samson Properties in Gainesville, Va. “The worst time of the year to buy a house could be spring.” Spring is also the season of mistakes, when lenders and title companies are busy. Loan processing takes longer. “Mistakes could happen,” she says. Also, you could run into pointless bidding wars, which drive up the prices.

Mind the market (no, not that market)
Remember those regional differences I mentioned earlier in this story? Sure, you might have less of a seasonal fluctuation in a warm-weather destination like Florida or Arizona. But you already knew that. You should also pay attention to interest rates. “We never know where rates will be in the future, or where prices will be, or what loan programs will be available,” warns Andrew Weinberg, a principal at Silver Fin Capital Group, which handles mortgages. “I have seen borrowers wait and then with rising prices and rates, they no longer qualify for the home and loan program they were interested in. So it is important to take advantage of the mortgage market when you qualify.”

He makes a valid point. You can play the real estate market by waiting until January to buy a house, but the best time to buy is when you’re ready. Jeff Peterson, a Dallas real estate agent, remembers asking his grandfather which car he should buy when he turned 16. “He said, ‘One that runs and is paid for,'” he remembers. He offers the same advice to home buyers. Instead of avoiding spring or waiting until mid-winter, buy when you’re ready.

“When you have saved enough money for your down payment and closing costs, have good credit, a great realtor, are secure in your job income, and are ready for the commitment of homeownership,” he says.

13 thoughts on “The truth about the best time to buy a home

  1. So, to sum things up:
    – Buy during the winter.
    – Buy during late spring through summer.
    – Don’t buy during the spring.
    – Buy now

    In short, do whatever it is you were already planning on doing, and you’ll certainly be able to find somebody important-sounding to validate whatever choice it was you decided to make.

    (For a realtor, it’s always a great time to buy/sell, because they don’t get paid to save/make you money; they get paid for closing a transaction, and they’ll pretty much say whatever the need to for that to take place.)

    1. I can share that the global comment about “they’ll pretty much say whatever it takes”, is not quite true. I am a real estate broker and a Realtor® (and there is a difference between the two: one is for licensing, the other is for Ethics oversight). I’ve been in corporate for most of my career. I got my license to advance my investing business. I now do real estate full time, but have been licensed about 12 years.

      Most brokers I know are not like that. You can get a commission check that way, but not build a business. If they want a business, they’ll need to ensure it’s the right deal for the client.

      However, because it’s a 100% commission based income, I don’t waste time. Clients can take as much time for the process, but my work week is budgeted to those whose priorities in transacting match mine. When those that aren’t ready now, are ready, then I move them up in priority. When they don’t, they get moved down.

      1. Forgive me if I’m not real comforted by the ethics oversight of the NAR®. This was an organization that tussled with the DOJ for years because of rules designed to exclude real estate services that didn’t charge as much money as the NAR thought they should. And they are the ones responsible for laws in some states prohibiting agents from rebating part of their commission to their clients.

        And lest we forget, up to, and during, the real estate bubble/crash, the NAR published reports from their economist every single month, like clockwork, about how it was a great time to buy a home, homes were in no way overvalued, anywhere, and any price drops were merely momentary blips.

        I don’t doubt that most brokers do the best job they can to balance their client’s interests with their own, but I have no such confidence in the NAR itself.

        1. First, I am not a shill for NAR. While I am a Realtor®, I find a lot of what they do as being odd (their position on tax reform, for example).

          However, NAR does have a Code of Ethics, and they are largely reasonable and they do codify a mission to put clients first. It’s not perfect, but it is an attempt to provide consistency and discipline within a professional body. Ironically, the DOJ (anti-trust) issues you cite are the very thing that precludes NAR from being anything more than advisory and voluntary. So, you demand strict oversight, while that very demand would likely violate anti-trust that you just bashed Realtors® about. It’s an odd argument, so I will just have to point out the hypocrisy of it.

          As for the crash, that was caused by the banks, not the NAR community. BUT if one bought a home during the crash, you did very well. The simple fact is that more millionaires are made through real estate than anything else. There’s only so much Earth and the population is growing. Thus, demand for land will – over the long run – cause an increase in prices. And, one can live in this type of investment (a home), while trying to curl up under a Facebook stock certificate is immeasurably less private.

          In the show on KOA I referenced earlier, literally every prediction I made came to pass (and I still have the MP3s of the show to prove it). I said prices would rebound, that renting was a great option for those in financial distress (rent out current home, and get something more modest until their personal economic circumstances improved), and that despite the chaos things would get better…and based on just about every story in the news about real estate, it has.

          Lastly, you conflate state/local control with NAR oversight. NAR is a professional body, that one joins voluntarily. LICENSING is done as part of an administrative law process in each state (as directed by each state’s legislature), or at the Federal level via HUD/RESPA. The rebating you speak to is not a NAR prerogative, it is born of the Feds and the States.

          I do believe rebating is a bad idea, but not for the reasons you likely believe. One of the reasons the crash took place was folks taking money out of their homes, faking financials, sleight of hand financials, and non-disclosure of financial capability. Anyone can charge what they want for their services, and I couldn’t care at all. My position is not about protecting a set commission or set commission rate.

          However, rebating denies the lender the visibility to all the money at the closing table. The lender is owed the opportunity to know what monies are circulating around the closing table because they’re writing the biggest check and have the most to lose (and it’s not their money, it’s their investors’ money). The rebating you champion is one pillar of the financial crash you decried. Again, odd logic is at play.

          While your one-dimensional thinking is all about a cash grab for yourself, you dismiss the need for transparent oversight. That means the lender, the real estate broker (one can be a real estate broker and not necessarily be a Realtor®), the borrower, the title company, the buyer, and the seller need to openly and objectively disclose EVERYTHING at the time of closing. Rebating evades ( I believe fraudulently) that oversight and disclosure, as it’s done outside of closing.

          But hey if they want to reduce their commission and increase net proceeds to the seller and/or decrease cash to close for the buyer, then negotiate the reduced commission into the offer UP FRONT so it can be auditable through the closing process and signed off by the lender’s underwriter with full disclosure, then go for it. I can’t tell you how many brokers who throw away their own money first think nothing of throwing away their clients’ money even faster.

          The sign of a good Realtor® is being a world-class negotiator. My experience has been the folks that throw away hundreds or thousands of their own money throw away tens of thousands of their clients’ money. I love the weak negotiator. It makes my job more fun, and it makes my clients more money.

          Frankly, I couldn’t care if you make fun of Realtors®. While I comment frequently, I am not nearly as prolific as you. It’s like it’s your full-time job. Just viewing your profile tells me you literally kvetch about everything: acupuncture, somebody named Dr. Novello, this, Goop, ….

          NAR is not perfect. I struggle with deciding to pay the dues every year because they do some things I disagree with. However, I do because I know it means that I have people who will hold me to account and make me do better. Knowing there is that oversight makes me more conscientious. And, frankly, on the whole they do more right things than wrong things by a country mile. And, my experience has been that nearly all who are licensed or Realtors® (or who are both) generally really do care and try to do their best. Like Congress, Corporate America, journalism, or any other job, there are always incompetent folks and worse yet there are truly diabolical folks. Thankfully, the latter are a mere fraction of the whole.

          1. mjclaxden – I agree with you 100%. I am not and never have been a Realtor or licensed real estate agent. For several years, I had a desktop publishing business and worked primarily with individual Realtors (residential and commercial), several real estate companies, the local Board of Realtors, Commercial Association of Realtors, State Association of Realtors, and CCIM, producing flyers, newsletters, etc.

            The vast majority of the people I dealt with worked long hours (weekends/holidays included), operated their businesses with strong values and handled their clients in a professional manner. I spent a LOT of time trying to educate the public about the differences of a Realtor, a licensed real estate agent, the Board of Realtors and the Real Estate Commission.

            I often wrote articles about what a Realtor may GROSS on a residential commission split the expenses he/she incurred, and what he/she would net. The expenses are too numerous to mention. In our community, very few netted six-figure incomes. And most of the high producers had high expenses.

            Are there dishonest people in real estate? Yes. As there are in many businesses and government entities. Do many people “wash out” of real estate within a year or two after getting their license? Yes. Because they do not realize that being your own boss, obeying many regulations, having patience to do a lot of hand-holding while clients are often making the biggest purchase of their lives, and running your own business is darn hard and requires one to be a self-starter with a great deal of patience.

  2. “If you’re a buyer, you know that someone marketing their home during the holidays is highly motivated, he says. In other words, they’re probably more willing to take a lower price, flexible buyer terms, or work on a condensed or extended closing schedule.”

    Conversely, if you’re a seller, you know that somebody who’s taking time to house-hunt during the holidays really needs to find a place soon.

    1. it is also silly because if your home is already listed, not going to take it off market for a month or two, just maybe not have showings…

      1. I would agree with you, but I’ve definitely seen people pull their houses from the market for a month or two. Also, they may be trying to game the “new to market!” angle, although Zillow, which shows you when it was listed and at what price, makes that harder.

    2. That’s usually true. In our case, however, we bought our house in December (1995) because we had just both secured new, good-paying jobs and it was a good time to start looking. As things turned out, we ran into a couple of snags in the process from the seller.

      Realtor informed us a week after we put down earnest money that seller was going into foreclosure because she hadn’t made a payment in a year; we then contacted seller’s mortgage holder, offering to take over the note, but they refused to deal with us. Agreed to buy house anyway. Had it inspected; basement needed a sump pump. Asked seller to install one as part of contract; she refused and tried to get us to up our offer (after the house had been on the market for several months with @ least 2 big price cuts). Finally her lawyer told her she’d better take our offer because it was the best one — the only one! — she’d had in about 6 months. We decided the house was everything we wanted, and the sump pump was not a deal-breaker. We’re still here nearly 22 years later.

  3. Chris,

    You buried the lede here. The lede is what Jeff Peterson was quoted as saying, “Buy when you’re ready.” Granted, it would make the rest of your article dull as hearing stories about my Aunt Mildred’s bunions, but it was refreshing to see real estate brokers objectively portrayed.

    I am a licensed employing broker in Colorado. The real story is: buy when it’s right for you or when you have to, sell when it’s right for you or you need to. Nevertheless, there is a very large body of statistics out there that indicates about 85% of business occurs in about 180 days of the year. In terms of lead generation that closes (within 90 days), about 40% happens January – March, 20% happens in June-July, and 25% happens between mid-October to mid-December. Those stats are from a real estate coaching organization, Buffini and Company, whose clients sell 1 in 8 homes in the US and 1 in 7 homes in Canada. So, there is a rhythm to the market.

    Sadly, we often we as a body get accused of pressure selling. However, many of those same members of the public forget the preceding conversation: “I have to buy a house before school starts”, “I want to buy before interest rates go up”, “I’m getting divorced”, or add any one of 50 more “I have to buy/sell now” scenarios. In short, I can’t tell you how many calls I get a month – or sometimes a week during the busy season – where you’d think I was a 9-1-1 dispatcher. One responds promptly, only to find out they have a single-digit credit score, saw an episode of House Hunters and thought they, too, should buy a new home, or they went to the cheesy Ramada by the airport and learned how to make millions flipping homes with no credit/low credit. I’ve learned to let the client take the time they need to feel comfortable with such a large purchase, but I’ve also learned to separate the serious buyer from the person looking to outsource their boredom by looking at homes.

    As for the right time, people bought and sold homes when interest rates were in the 18.5% range. Mortgage rates peaked at 18.63% on 10.09.81. Guess what? People still needed to buy and sell homes…and they did. (I was only 15 at that time, but the source is from the Fed at https://fred.stlouisfed.org/series/MORTGAGE30US .)

    As for Case-Shiller, it’s well-publicized, but hardly a global indicator. It’s only a very small subset of markets (10 & 20 city composites) and IT’S true value is that it’s pimps the options and futures on the Chicago Merc based on it. Don’t get me wrong, it’s a valid data-point, but it’s a super small sample and has been wrong at key points of inflection — which is it’s “raison d’etre” for many in the press. (I did a whole show with David Michonski about this on KOA in Denver about 10 years ago.)

    Right now, I can tell you this: The Fed is going to back off of Quantitative Easing. That means higher interest rates, and you will qualify for less. That’s the stated policy of the Fed. That will mean at the margin, fewer people qualify, and those that do qualify for less. That’s just math. The interest rate change from 3.5% to 4.0% (roughly) means you can buy $20,000 less keeping the payment the same. Again, that’s math. If you’re selling, that means the interest rate sensitive client just fell out of your potential buyer pool…get enough of those, and your home price drops…or doesn’t sell.

    But, in the end, it’s what is right for you when it’s right for you. I was just glad to hear that truism shared in the column.

    1. “The interest rate change from 3.5% to 4.0% (roughly) means you can buy $20,000 less keeping the payment the same. Again, that’s math.”

      Um, no. It means you can buy about 5.9% less and keep the payment constant. It only means you can buy $20k less if you were planning on spending ~$339k in the first place.

  4. Australian real estate prices in general have boomed over last 10 years but nose diving now. However listen to the media & prices are still going up.

    Why ?

    Cos media makes billions a year in real estate advertising. So they’ll even try & talk it up even in a depression.

    & BTW renting a crowd is cheap. & auctions are so dodgy. So many bids aren’t even real & impossible to stop fake bids

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