Is the Festive Season the right time to buy a property?
Category Residential sales
Tis’ the season to be jolly- spend cash you don't have, dance on tables at office parties, indulge too much and meet up with friends you haven't seen since last Christmas! Certainly it's not a time to buy and sell houses. Or is it?
The peak purchase season tends to kick off around the last week of August, build up to a peak in late September and October before winding down through November. Finally it comes to a standstill in December. The logic seems obvious - people go on their holidays in the summer, by Christmas they're only interested in talking turkey.
But the experiences of estate agents show that a contra trend approach can benefit both buyers and sellers through the season wind down in particular - if they time it properly. Buyers who get in just before Christmas can take advantage of discounted pricing as those sellers who haven't sold their homes by now are getting increasingly desperate.
By Christmas estate agents are generally left with a book full of homes that are over ambitiously priced. Sellers who have ignored their selling agent's advice on price begin to wake up and smell the coffee as November winds on. Those sellers are also usually planning to trade up or down and when it becomes apparent that they won't be moving for Christmas, they'll at least want to have a home lined up for the new year instead.
Through November the flow of properties to market peters off, along with the numbers viewing. Fed up with people traipsing through their homes each weekend, they'll decide to "just get the thing sold - whatever it takes." And this is where a shrewd unseasonal buyer can make a Christmas killing.
There is good reason for getting a house sold before Christmas. A property that carries over New Year from one season to the next can become "stale" in the eyes of home hunters. Potential buyers who have not found a suitable property before Christmas will recognise a "lingerer" in the New Year and it will have an overfamiliar flavour to it. They may implicitly form a view (however miscalculated) that there must be something wrong with a property that has gone all the way through to Christmas and reappeared the following year without achieving a sale. They will by nature be looking out for "new" offerings.
In contrast, it could also be strongly argued that January is in fact the best month in the year to launch your house for sale. This is because once Christmas is over, serious home hunters tend to hit the ground running straight away and steeled with a stiff New Year's resolution resolve. "Now Christmas is out of the way, it's time to buy that house. Let's do it!"
But those who plan to sell their homes are only getting over Christmas. The decorations have to be taken down, the property needs a cleanup. They'll want to cut the grass and they'll want to have a painter through to brighten things up before the estate agent's sign goes up. There might be just five buyers through a house in January instead of 20 in April, but all five of those January viewers will be keen to do a deal. As a result you do see homes fetching that bit more early on in the year.
But regardless, fewer potential buyers will take advantage of the seasonal market shifts this year or next year, simply because the herd mentality usually prevails with property – which is why a few always make money at the expense of the crowd when it comes to buying and selling.
Mulled wine anyone?
Author: Urban Link