Updated by Craig Berry
In most locations, spring is considered peak real estate buying season. And while the fall real estate market is not traditionally as robust as the spring market, turns out, not only is fall a great time to buy, it might be the best time of year to buy a house.
Buying a home in October
So what month is ideal for buying a home? October. According to RealtyTrac's analysis of more than 32 million home sales covering 15 years, on average October buyers paid 2.6 percent below estimated market value.
For a home that would normally sell for $250,000, 2.6% translates to a savings of $6,500. This can mean more money for a down payment and a smaller loan amount, lowering monthly mortgage costs.
A big reason for cheaper deals in the fall has to do with competition. Similar to the beach after Labor Day, the real estate market tends to clear out as the leaves change color.
According to Charlie Young, president and CEO of ERA Real Estate in Parsippany, N.J. "A lot of people see Labor Day as the beginning of a new year, when the summer holidays are over and everyone goes back to school and back to work. "The real estate market picks up because buyers who are planning to move want to be done by the holidays. Some people are also driven by the idea that they want the tax benefits of home-ownership this year rather than next year."
ERA Real Estate surveyed its network of over 30,000 brokers and agents about fall home buying trends to see what drives real estate activity in the that season.
According to the ERA survey results, the buyer mix typically consists of:
- First-time homebuyers: 27 percent
- Move-up buyers: 20 percent
- Buyers downsizing/retiring: 17 percent
- Investors: 14 percent
- Military relocations: 11 percent
- Vacation home buyer: 6 percent
- Other: 5 percent
3 Benefits of buying a home in the fall
These fall home-buying advantages combine to provide compelling reasons to buy a home this fall.
1. Motivated sellers want to close by year-end. Many home sellers want to take advantage of a gain or loss during this tax year. Buyers may find homeowners looking to make a deal so they can close prior to December 31st and get that tax break.
2. Lower prices. Many sellers put their homes for sale in the spring. Some sellers get overly aggressive, listing their homes too high. This can result in a series of price reductions following the spring and summer months.
3. Less competition. It's no secret that a spring home with green grass and fresh flowers tends to show best. Likewise, when flowers die, trees beginning shedding their leaves, and one-time beautiful landscapes aren't quite as beautiful. Some buyers fail to look past seasonal landscaping or other minor flaws when buying a house and steer clear of certain homes, minimizing the likelihood of encountering a multiple-offer situation.
Why buy a home now?
During peak selling months, everyone involved in real estate transactions tends to be busy. In the fall months, however, real estate agents, lenders, inspectors, title companies, moving companies, etc. experience a lighter schedule, giving them more time and energy to focus on helping you.
Getting a mortgage loan comes with its own set of hurdles. Especially if you're a first-time buyer, home buying can have less anxiety when your mortgage lender has more time for you and your loan.
Another important factor worth noting is this. Not only are most sellers worn out after the summer selling season, they also have to contend with the holiday months fast approaching. If they want to move and get settled in prior to Thanksgiving and Christmas, they'll have to get moving, fast.
Best time of year to buy a house
There are both psychological and financial motivations that make for great reasons to buy a home this fall. The fall season creates a different dynamic that drives autumn sales.
After you find you dream home and close on it in the fall, you may decide to upgrade some of your appliances. Fortunately for you, December is the time of year when major appliances such as refrigerators, stoves, washers and dryers are at their cheapest.
According to Consumer Reports, September is the best time of year for buying paint and carpeting. December is the best time to buy major appliances, cookware and TV's. After you're all settled in, it may be the perfect time to renovate that new home.
As always when buying a home, location plays an important role in the decision. Consult with a real estate professional in your market to learn more about local trends and decide when to buy in your desired area.