Buying a home during the holiday season...

[irvinehomeowner]

A year ago I posted on this topic on the Redfin forums:
http://forums.redfin.com/t5/Orange-...in-the-holiday-months-a-good-idea/td-p/147362

Bob's blog post (http://southorangecounty.wordpress.com/2010/09/22/the-best-home-buying-season-of-the-year/) had some good points but I still contend that available inventory isn't as high during the holiday season for the same reasons why there are not as many buyers. The numbers I looked up in Redfin seems to mirror that but Bob contends that Redfin's data is wrong and that there are indeed the same number of homes available during the winter as there are during the spring/summer.

As I posted, I believe there is an advantage to buying a new home over a resale during this time because of the smaller buyer pool... but I don't think there is a significant advantage for resale as there are less homes available and therefore less "seller competition".

I guess I would prefer to buy when there is more inventory than less inventory.

 

[usctrojancpa]

A year ago I posted on this topic on the Redfin forums:
http://forums.redfin.com/t5/Orange-...in-the-holiday-months-a-good-idea/td-p/147362

Bob's blog post (http://southorangecounty.wordpress.com/2010/09/22/the-best-home-buying-season-of-the-year/) had some good points but I still contend that available inventory isn't as high during the holiday season for the same reasons why there are not as many buyers. The numbers I looked up in Redfin seems to mirror that but Bob contends that Redfin's data is wrong and that there are indeed the same number of homes available during the winter as there are during the spring/summer.

As I posted, I believe there is an advantage to buying a new home over a resale during this time because of the smaller buyer pool... but I don't think there is a significant advantage for resale as there are less homes available and therefore less "seller competition".

I guess I would prefer to buy when there is more inventory than less inventory.

Inventory levels in Irvine today are only about 6-8% below what they were in the spring and summer.  There's a lot of stubborn sellers out there who are looking for a sucker so those homes haven't moved and just collect dust on MLS.  It all comes down to when the right home comes out at the right price, it's all timing so I'd argue that seasonality doesn't have much to do with that.

 

[irvinehomeshopper]

Stubborn sellers are not in any pressure to sell. They are testing the water and if successful finding a knifecatcher sellers will move to a brand new home in the same area.

 

[Liar Loan]

As I posted, I believe there is an advantage to buying a new home over a resale during this time because of the smaller buyer pool... but I don't think there is a significant advantage for resale as there are less homes available and therefore less "seller competition".

I guess I would prefer to buy when there is more inventory than less inventory.

I think from a pure pricing perspective you are not correct.  If the decline in buyer demand was offset by a decline in homes for sale, you wouldn't see a dip in pricing at this time every year.  The price indexes whether they be median, Case/Shiller, or PPSF all show dips in price for closings during the first 6 weeks of the year.  These are escrows that were entered into between Thanksgiving and New Years. 

The opposite starts to happen for escrows entered into after New Years and this is reflected in the closings for March & April as higher prices.

 

[irvinehomeowner]

I think from a pure pricing perspective you are not correct.  If the decline in buyer demand was offset by a decline in homes for sale, you wouldn't see a dip in pricing at this time every year.  The price indexes whether they be median, Case/Shiller, or PPSF all show dips in price for closings during the first 6 weeks of the year.  These are escrows that were entered into between Thanksgiving and New Years. 

The opposite starts to happen for escrows entered into after New Years and this is reflected in the closings for March & April as higher prices.

I'm not saying price indexes don't go down during the holiday season... I just don't think that necessarily translates into it being the best time to buy.

Price is only one component... I don't really care if houses are 10% lower if none of them are the house that I want.

"Median" once again doesn't tell the whole picture (at least to me). How do I know that the price index isn't lower because higher priced homes don't sell as well during the holiday season... that most people who are buying are people who don't have families/kids/etc so it's the smaller homes being sold thus bringing the "median" down.

I'm not sure how this means I'm "correct" or not... I'm just sharing my opinion of whether it's a "significant" advantage and basing it on my own experience:

1. We bought a new home during the holiday season because the builder was desperate to move inventory before the end of the year, so we got good incentives. Resale sellers can don't have to close their books before the new year. We noticed that almost every new builder was throwing incentives during this time of the year, and has been consistent for many years since then (as we are serial new home lookie-loos).

2. We bought a resale home during the summer because that's when the most inventory was available and we were able to choose from the same floorplan in 3 different locations. We were able to leverage those against each other when submitting offers. This goes back to my opinion that lower choice of homes during the holiday season may not result in a purchase even if prices are lower.

 

[freedomcm]

I suspect that you can do better during the off season for a purchase, so long as you stay picky.  Of course, the pickings may be more slim, but i you find something that you like, it is more likely to be from someone relocating and they tend to be more realistic/motivated. 

Note that this argument does not apply to "the market", just to an individual purchase.