As Rain Falls, So Do Real Estate Prices- Top 7 Winter Home Buying Tips
We have all heard that home prices drop in the winter season but how true is that in right here in Pasadena. Let’s see how true it is, why it is and how you the home buyer can put it to practical use.
How Real Is a Dip in Prices?
Real Estate sales data proves that home values do in fact drop in the months of November, December, January, and February. Diving into the data from CoreLogic we can look at homes that sold in the city of Pasadena over the past five years. Focusing in on homes under the $1.25million price tag we can clearly see that the average sold Price Per Square Foot has consistently dropped every winter since 2012. Not only that, these lows are never again seen. Winter prices are truly the all-time low.
Ok, we know there is a dip, but why, well a perfect storm of factors are at play.
While the winter weather in Pasadena is mild in comparison to the rest of the US, it is all relative. Cold temps in 50’s will devastate us fair weather people and our thin blood. We hunker down when it rains and snow-capped San Gabriel’s is cause for apocalyptic concerns in a far too large percentage of our population. It all equates to fewer people out shopping for homes and less demand means the pricing power shifts slightly to the buyer.
Would-be home buyers shift their focus to gift giving, making travel plans and attending holiday get-togethers. Fewer buyers mean less bidding wars.
Seller State of Mind:
Houses that list in winter can also indicate a seller that is less motivated by profits but prefers a simple transaction in an expedient fashion. This could equate to less haggling and tiresome negotiations.
A property on the market in the winter months can’t hide what bad weather does to it, these defects can result in significant reductions in the final cost of the home.
Note, the one downside to taking advantage of Winter buying is that options are limited compared to the peak season. If you are dead set on a specific home style, very specific features, and have very little leeway in what you seek, you will grow frustrated quickly. Those with flexibility will reap the rewards.
So, My Top Seven Tips on Why Buying in the Winter is the Best:
1. Don’t Be Afraid of The Rain. I won’t be, and a seller that sees that you aren’t afraid either will know that you are serious.
2. What Does Winter Weather Tell You? Don’t skip open houses during bad weather. A home’s most honest condition is in the winter. You will see things you wish you did. Hot and cold spots, leaking roofs, water drainage is all evident only during winter conditions.
3. People Are Friendly. Holiday cheer, regardless of religion, is synonymous with this time of the year. Negotiations go smoother, transactions happen with less stress. People are generally good at this time of the year.
4. Set up Listing Alerts. You will want to move fast. Set alerts both on the Zillow mobile app and definitely through me. Your phone will push real-time updates to the area you desire, my alerts will be more granular and scrub out problem properties resulting in less wasted time.
5. Hire me as your Buyer’s Agent. I cost you nothing, I literally work for you for FREE (I am paid by splitting the commission that the seller pays). In return, I am your guide for showings and neighborhood knowledge. I too am your advocate for negotiations, mountains of paperwork, and your lifeguard for the endless pitfalls that can derail a home purchase. In the slow season, you have even more of my attention.
6. Mortgage Rates Will Go Up Next Year. Rates are low and they will go up, we know this and we have seen some of it already. Get Pre-Approved now and your winter offers will be taken seriously. Plus you will know exactly what you can afford.
7. Motivated Sellers. Listing in the winter is usually a sign that sellers have an urgency to sell. Less back and forth on pricing and repairs, a cleaner and cost-effective transaction should be the result.
Michael Robleto is a REALTOR® with Pasadena based boutique brokerage Podley Properties. His analytical and open approach to sales has served his clients well in his twenty years of sales. Michael brings a modern data and technology-driven approach to real estate while focusing on the historic architecture of Bungalow Heaven. For Sellers or Buyers Agent representation he can be contacted directly.