They say patience is a virtue and timing is everything. For those house hunters who have been unsuccessful in getting their offer’s accepted, stay positive! Statistically speaking, the coming months should swing more to your favor than the first half of 2018. If purchasing your first home has been your goal for a while, but you have been outbid, or lost out to other offers with a stronger down payment; don’t get discouraged now. The pendulum has been swinging back a bit in your favor, and should continue to do so as we enter into that home buyers sweet spot known as summer time!
Supply & Demand
Normally, seller’s will put their homes on the market after they have had time to make some last minute touch ups on their home, including landscaping after the weather has warmed. To add to inventory, some investors who have purchased distressed properties over the winter, have had time to improve them, and are now ready to bring them to market. Therefore, more listings can often peak in the Summer. This, of course, is after the frantic Spring market has passed and some first time home buyers have already successfully negotiated contracts. Other potential buyers may have gotten discouraged and given up for the year, renewed their lease and will “wait until next Spring” to start looking again.
Finally, other buyers are frankly too busy with summer activities to be immersed in the house hunting process. As a result, they are not as aggressively looking for a home as they were in the Spring. For these reasons, there is usually less competition for homes compared to the past few months, and this summer is where you can take advantage of being engaged in the market, and being an active Buyer!
According to Zillow, the highest percentage of price reductions occur in the dog days of Summer. Although, we will most likely not see home prices reduced anywhere near Zillow’s statistics in our red hot, West Michigan seller’s market, we may see a greater percentage of sellers starting to accept FHA, VA, RD and MSHDA offers. To repeat, this Summer is where you can take advantage of being and active and engaged buyer.
Zillow’s data takes into account price reductions only. It may stand to reason that the reductions in the summer are a result that some sellers are trying one last attempt to get their home sold before trying again next Spring.
RealtyTrac has also compiled some evidence that suggests this to be true as displayed in the graph below:
The graph above shows April as the month favoring the Seller in terms of getting a premium price for their home. As the Spring market starts to cool, there is a nice bump for Buyer’s in July, with Seller’s apparently starting to take more of a discount for their homes. The discounted prices remain more favorable for buyers in August and September than in the Spring, but subside late summer as there may be a dip for the pre-fall scurry of some families looking to purchase their new home prior to the new school year starting. However, a slight movement upward may be skewed as being more relevant to 2nd time home buyers this time of year, while 1st time home buyers may still reflect the discounted numbers as seen in July. Finally, October tops off as being the most heavily discounted time of year for a buyer to purchase a new home, so stay engaged and in the market!
Home Buying Tips
Get Pre-Approved: Getting pre-approved ahead of time means a lender has looked at all of your financial information and they’ve evaluated how much you can afford. This will save you a lot of time and energy later and get you one step closer to finding the right price, home & property. More importantly, it will help you get your offer accepted quicker over competitors.
Set yourself apart: Setting yourself apart from the competition as a buyer in this market is key. Make sure you are prepared when getting into the market. When you find that perfect home that meets your pre-requisites, and it is in your price range, you do not want anything holding you back.