Luckily for us here in Southern California, winter means a slightly lower temperature average and a bit more rain. Unlike most of the country, life doesn’t change much once winter months hit. This is true for the real estate market too. While it does tend to slow down a bit, winter is still a great or even better to buy a home, but there are a few things you should know first.
Here is what you need to know about the winter real estate market:
1. Slimmer pickings, but also less competition
It is true, there are fewer homes on the market in the winter than any other time of the year. But this should not deter you from buying this season. While the inventory may be down, so are the number of buyers out looking for a home. This means you, as a buyer, will have less competition.
2. Abundance of starter homes
For first-time buyers, this is the time of the year you should be looking. According to Trulia, the inventory of less-expensive starter homes actually increases by 7 percent during the last three months of the year.
3. FHA buyers are more likely to win a bid
FHA buyers tend to be less appealing to sellers because of their loose requirements compared to those with a traditional loan and bigger down payments. With less competition, sellers are more open to FHA buyers.
4. There go the open houses and bidding wars
A typical open house during the summer can attract 50-100 buyers with a listing often receiving more than 10 offers. In the winter, the opposite occurs. An open house may attract only a dozen serious buyers with one to two offers. If you’re looking for zero competition, stick to the few weeks right around Christmas.
5. Interest rates are still low
The last few years, we’ve been blessed with low-interest rates. Many experts believe that in the new year the Federal Reserve will raise rates. If you’ve been thinking of buying a home, now is the time to do so while rates remain low.
6. Deals are ready to be made
Sellers in the winter are often motivated by some other factor, such as job relocation. Also, homes that have been on the market since the fall are also more susceptible to accepting a lowball offer.