Home buying in January might land buyers a much better deal. This is according to Nerd Wallet, which used Realtor.com data to determine that the least expensive month to buy a home in Austin, Texas is in January. And it’s no small matter: based on a two-year average of median sales prices, buying a median-range home in January could save buyers about $24,000.
In Austin, the report found that the summer house price (the two-year average of the median sales price) was $256,132. The fall price was $250,565, a drop of 2.2 percent. The cheapest month to buy was January, when the median house price was $232,500, a drop of 9.2 percent.
The report found that home sale prices in all large United States metro areas typically peak in the summer, dip in the fall, and then are lowest in the winter.
“If your circumstances give you the freedom to be able to choose the best time to look to sign a contract on a new home, there’s no question that the market dynamics favor you the most to do that in the dead of winter, ideally in January or February, right before the activity starts to heat up,” says Jonathan Smoke, chief economist for Realtor.com.
It’s important to note the report is based on sales price, not list price, and that the difference between sales and list prices contracts in peak buying times like summer and expands in slower times like winter.
Typically, spring is when a large number of homes come onto the market, with a peak in summer. Then, “Sales drop significantly when the school calendar begins in August in many parts of the country, and certainly by the time you hit Labor Day, we’ve really seen a significant amount of people drop out of the market,” said Smoke.
In winter, the market typically sees the lowest amount of inventory and the fewest buyers. “You have 50 to 60% more inventory relative to the number of buyers, so there’s basically more options per buyer, and that translates into less competition,” Smoke said.
He said if shopping for a home during the off-peak season when homes are on the market longer, “You can have more leverage, in terms of presenting more aggressive offers, asking for contingencies or things you might not be able to in the peak of the season.”
He closed, “I think there’s a certain amount of inertia that exists in the market because people have been told the best time to buy is when the most homes are on the market, when, actually, depending on what your goals and objectives are, the actual reverse could be true.”
- The most home inventory can be found during the summer, especially June and July, but it’s also typically the most expensive time to buy and the time of most competition.
- There is a decrease in home sale prices once fall hits, although listing prices don’t change much.
- January and February are the two months nationwide that have the lowest sale prices, something to consider whether buying or selling.