But if you’re a potential homebuyer who’s prepared to close in today’s competitive market, you may want to keep shopping while everyone’s waiting for spring, some real estate agents suggest.
That advice may be especially relevant this year for consumers who have repeatedly lost out on deals because of a limited and continually decreasing supply of homes, but remain persistent. Buying intensity typically cools down at the start of fall through early January, which could increase the odds for those with more patience.
Related: Report: HomeBuyers Face A Tight Market
Home sales have increased from October to November only four times since 1988, when DataQuick began to track home sales and prices locally.
In the other years, transactions have fallen from anywhere between 0.2 percent and nearly 26 percent. Home listings have dropped off from 3 percent to 11 percent during those months in the past three years.
“During Christmas, people will be focused on the holidays and nothing really happens,” said Ken Pecus, co-founder of San Diego-based Ascent Real Estate and 20-plus-year real estate veteran.
“The first week of January, the new mindset kicks in, resolutions kick in, and in the second and third week, people look at their taxes, and almost overnight, by the end of January, you have almost twice the buyers in the market,” Pecus added.
Would-be buyers historically have bowed out during the winter season because they are overwhelmed by holiday spending and commitments. There’s also the aversion of moving in the middle of a school year. Consumer interest typically picks back up again in the New Year and peaks in the spring.
Certain buyers may be well-served to buy during the winter because of sellers who must move because of:
•?A job change or transfer
•?The possible sunsetting of the Mortgage Forgiveness Debt Relief Act, said Donna Sanfilippo, president of the San Diego Association of Realtors. The potential expiration of the law, which lets certain home sellers get tax relief on mortgage debt forgiven by lenders, has pushed home sellers scrambling to list and short sell their homes before the end of the year.
In some cases though, the rush to do that is unwarranted. Consult a tax pro to determine if short selling is right for you.
•?The fact they’ve been waiting to sell their home for a long time and need to buy something quickly. If you can wait a little longer to sell your home and want to maximize your profit, then wait until the peak spring months.
Even with the expected holiday homebuying slowdown, buyers should know that the inventory level may still be a challenge.
Right now, there are more than 4,700 active listings in the county, down 11 percent from October and down more than half from the same time a year ago, based on numbers from the San Diego Association of Realtors. The current level marks at least a three-year low.
Buyers also may deal with the challenges of bidding against cash buyers and investors, who can look more attractive than traditional buyers.
Their share of the home buying market has remained strong. Almost 28 percent of total homes sold in October were purchased by absentee buyers, many of whom are investors. That’s up from 27 percent logged a year ago and in September.
Hovering near the peak, almost one-third of buyers bought with cash in October.
“I’m expecting 60 to 70 people at my open house,” said San Diego Realtor Miguel Contreras before a recent Wednesday showing at a property in La Mesa. “The property is a fixer, so it’s mostly investors.”
Related: Another hurdle for short sales
Contreras, who worked during Thanksgiving week, said he’ll make himself available throughout the holidays to cater to what he expects to be a continued interest from investors, cash buyers and traditional buyers.
The same goes for Cherilyn Jones, another local real estate agent. Last week, she was preparing for two new listings to come online. Her most common clients are first-time homebuyers and investors.
“The investors have not slowed down,” Jones said. “We get holiday freeze, but not for investor clients. It’s hard to find them properties because their criteria is very, very specific … and the deals are not as good as they used to be.”
Source: SD Union Tribune-Lily Leung