Real Estate Buyer Tips: Why Buying This Winter is a Smart Strategy

People who work in real estate understand that the best time to sell a home is springtime, when the weather is nice and homes and yards look their prettiest. Winter, on the other hand, is Dullsville. Lots of real estate agents are forced to get a second job just to tide them over through the cold, dreary months when nobody wants to go house shopping. Buyers just aren’t inclined to get excited about trudging through ice and snow to tour homes that might be vacant and unheated. Frigid weather, in other words, usually means that real estate sales are dead.

Things thaw out when the weather warms up again, and that’s why it is so hard to predict how prices will react between autumn and springtime. I had a coworker who owned a home and was going to sell it in the fall, when the listing agents and potential buyers said it was worth $150,000. Instead he waited until spring, to capitalize on the historically brisk season for selling houses. When he called the listing agent back (just four months later) she listed it for $250,000 – which my coworker thought was a typo. “Oh no,” said. “That’s what houses like this are going for now.” Prices had languished across winter, when it wasn’t possible to sell even for $150,000. But when the daffodils came out people were willing to pay an extra hundred grand.

So what does that have to do with buying in winter? My point here is that if you want to buy low, not high, you should go house hunting when you’ll have no competition from other buyers. Home sellers and their agents will also be desperate to make a sale, and that means you’ll have the upper hand when it comes to negotiating a more attractive price and more favorable terms. You could have snagged my coworker’s house, for instance, for $150,000 in winter. But the buyer who finally got it paid $250,000 because he waited for the busiest and most lucrative time of year for home selling. During those several weeks that he waited the price almost doubled.

I mean, how many people do you know that go house hunting during the holidays instead of shopping at the mall or attending parties? Who wants to look at houses when the weather is drab and icy and the landscaping has turned brown? Trust me. If you hop in a car with a Realtor between December and March – unless you happen to be in a winter escape paradise like Florida or Southern California – you’ll have little or no competition from other house hunters.

That brings me to another benefit of off-season shopping. You get the full focus of your real estate agent, because he or she is not busy serving lots of other buyers and sellers. Instead of waiting for weeks to hear back from your agent you’ll probably be showered with attention. They will arrange their schedule around you instead of the other way around. They’ll work harder to find your dream home. They’ll spend more time negotiating to ensure a quick sale. They’ll show up in person to help facilitate a smooth closing, rather than sending their newbie assistant to oversee the proceedings because they are preoccupied with a dozen other buyers.

But the outstanding reasons I’ve already outlined are not the most exciting and compelling reasons to shop for a house this particular winter. I’ve saved the best for last. The really attractive perk for winter home shoppers right now is mortgage interest rates, which are hovering around a measly 4%. That is cheaper than rates have been since they started maintaining detailed housing statistics. We haven’t had a chance to leverage someone else’s money at this great price in about 50 or 60 years, and we probably won’t see these rock bottom rates come around for another century.

The Fed has been artificially maintaining low rates for years, in order to help avoid devastating inflation in the midst of a harsh recession. By doing so they risk deflation, and that dreaded phenomenon can cause our money to start losing value year after year, so they are eager to nudge rates higher. As soon as a little stability returns to the markets the Fed with raise rates as high and as fast as possible. Mortgage rates will head north.

Oftentimes the economy will make a dramatic shift during an election year, and that is also on the horizon. Last but not least, base rates have been a fraction above zero for several years, so even if the Fed wanted to push rates lower it has no room to do so. They are already deep down in the basement, with no place to go but up.

That means that if you lock in a great 30-year or 15-year fixed rate mortgage at around 4% – and some are available as low as 3% for those who pay a little extra in closing costs – you’ll likely get the deal of the century. You’ll enjoy a lower monthly payment for years to come. Meanwhile you can couple that with a great off-season price on a house, at a time when housing prices are already selling at Black Friday levels.

So if you are in the market for a home and mortgage bundle up in some warm clothes and call your Realtor. This winter just may be the perfect storm – not just in terms of blizzards and low temperatures but also as far as prime opportunities to capitalize on a remarkable window of opportunity for residential real estate buying.

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