I've written before about the opportunities for home buyers in winter. It's the best time to buy a home if you can brave the weather and the holiday schedule. Buyers at this time of year have little competition, and sellers know it. Now, I have statistical evidence to back up the notion.
Here's the simple analysis: Match up the troughs in the chart above, and you'll see that there's a very consistent pattern every winter. While the multi-year trends are all upward in direction, when we hit December every year, sellers are listing their homes at lower prices. At the same time, buyers are negotiating bigger discounts on those homes. In combination, you're seeing home buyers getting the best prices on homes, by far, during the winter.
The statistics used were very broad. Over 36,000 transactions in Seattle, recorded on the Northwest MLS, were included. From early 2011 through late 2014, we looked at the original median listing price, or the price that sellers first posted when they put their homes on the market. We also looked at the sale-to-list price ratio, which measures how much lower the final selling price was than the advertised listing price.
Remember that Seattle homes prices were going up throughout this entire time frame. Every year, median prices were higher, but we still had those troughs of list price depreciation in winter. It frankly doesn't make sense in terms of the market's momentum, but practical factors like buyer scarcity apparently entice sellers to post less aggressive prices on their homes in December.
The same story holds true for the bigger discounts buyers were getting in winter. Based on low inventory and appreciating market prices, sellers should be holding firm in winter on their prices. That just doesn't pan out in real life, however, as they statistically allow buyers to negotiate prices down further during the month of December.
Without getting too deep into the details, the median original listing prices in December of each year were 10 to 20 percent lower than their maximum prices in the same year. Buyer negotiations netted discounts of one to two percent (of the purchase price) more than they did in the best months for sellers, typically April. That basically meant doubling the discount in terms of raw dollars.
There are plenty of other factors that could have affected original list prices, including different property types and categories being listed more often at different times of the year. Still, it's very unlikely that they make up for the entire change in original list prices. As for the negotiated discounts, the only conclusion we can come to is that sellers are more flexible in a December negotiation.
Winter is the time to buy in Seattle. Your friends may think otherwise, but they're playing the "nice sunny open house" game, not the "get the best price I can" game. If you have the ability to buy a home during the winter months, you can take advantage of being that lonely buyer with sellers tripping over themselves to get you under contract. That's a nice trade off for braving a little bit of cold and rain.
DeBord, Sam. "Surprise: Seattle Stats Say Winter Is A Better Time To Buy A Home." Seattle PI. 12 Nov. 2014. Web. 2 Feb. 2015.
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