Trudging through snow and sleet in boots and heavy coats might not seem ideal when you’re shopping for a home, but there are many good reasons to buy in the dead of winter. For example, you’ll have less competition from other buyers or encounter more sellers eager and willing to make a deal.
But as you may have heard, we’re coming up on what may be the worst day of the entire year to buy a home: Jan. 19.
That’s what RealtyTrac (now ATTOM Data Solutions) found in a 2015 study that culled data from 32 million home sales from 2000 to 2015. Researchers compared premiums paid over estimated market price to define the best and worst days. (For the record, they found the best day to be Oct. 8.)
Buyers who closed on Jan. 19 paid, on average, 9.6% above estimated market price.
So as the dreaded Jan. 19 approaches, we thought we’d take a deep dive into its (deservedly) lousy reputation. It turns out that its roots of badness lie in when you’re shopping, rather than when you’re closing.
Market speed matters
If you live in a market where offers take a long time to close, you probably agreed on a price long ago—possibly before there was even the faintest chill in the air.
Take New York, for example: “In general, it takes about 30 days to close on a single-family home or condo in most places in the U.S., but in NYC, the average is closer to 90 to 120 days,” says Steven Kopstein, a real estate agent with TripleMint Real Estate in New York.
If you’ve been waiting that long to close on your house, you probably made your first offer sometime between September and October, when there’s typically more competition to drive up offers and push you over market price—which will then be reflected in your Jan. 19 closing.
Blame the holidays
On the flip side, what if you’re in an area with a shorter average closing time—say, 30 days or so? Perhaps you made an offer around mid-December and find yourself at closing on Jan 19. Since home prices are generally lower in the winter, you’ve escaped the kind of markup that fall buyers faced, right?
Not necessarily. If you’re buying around the holiday season, there’s a good chance you’re facing pressure to just get it over with.
“I’d suspect someone that’s having to buy a home (around Christmas) is probably pretty motivated and not looking at timing for the best deal,” says Daren Blomquist, senior vice president at ATTOM.
But maybe you’re not a holiday kind of person, and when December comes around, you’re stress-free and ready to negotiate for a stellar deal. Here’s the thing, though: While experts (us included!) usually tout the advantages of shopping for a home during the winter, when there’s less buying competition, you aren’t always going to get a deal—especially around the holidays.
Why not? It’s a tough time for sellers. Perhaps they’ve watched their home linger on the market throughout the fall but want to wait until the new year to cave and lower the price. Perhaps they’ve taken their home off the market for the holidays, with plans to relist in January.
Either way, Blomquist says, there are fewer homes in a given price range available in that month before Jan. 19—and thus, fewer sales. And that’s reflected in the closing data, he says.
“We looked at each day over the 15 years. The number of sales that occurred [on Jan.19] were 53,000, which is on the lower side,” Blomquist says. “Most days of the year, we’ve seen over 90,000 sales.”
Should you time your home shopping to avoid this inauspicious date?
Sure, you can find out what your market’s average closing time is and try to plan your home search accordingly. But if you’re in the market to buy a house, you shouldn’t put off your home search for several months just because you might be looking at a Jan. 19 close.
Because, just to come full circle, there are still plenty of advantages to home shopping in winter. With less competition, you could have the jump on other buyers and avoid a bidding war. Overall numbers don’t always tell the individual tale. And, as Kopstein has seen, many sellers are willing to accept a lower offer during the winter—especially if they need to sell before spring.
But are you the superstitious type? Well, you could push it to Jan. 20 instead. Which just happens to be Inauguration Day.
Of course there’s always February..... Just in case!