Do you know the three limitations that come with doing your most active looking during periods of the year where real estate is traditionally quiet? Do you know what the off-seasons are? Let’s discuss.
Limitation Number One: Distressed Properties
The first limitation is distressed properties. A distressed property is a home on the brink of foreclosure or already owned by the bank. Investors often seek these properties out because of the opportunity to buy a home at a discount. However, these properties tend to need significant repairs.
Properties during the winter and summer months tend to be on the market a little bit longer than properties that are being sold in the spring and the fall. Regardless of the season, the best properties are going to sell relatively quickly. Those properties are the ones where buyers can explore the home without the sellers present, are staged, have fresh paint jobs, and additional changes to make the property look more aesthetically pleasing to the average buyer.
So, that tells us that the properties that are still around in the summer and winter months have been on the market for a long time. They most likely have not been staged, probably require renovations, whether it be structural or cosmetic. You’ll have to go through those properties and really look for the potential of the property and not pay too much attention to the actual state of the property as it is.
Limitation Number Two: Inventory Levels
The second limitation is inventory levels. Let’s say that you’re actively looking in December or January, or even August, which I would recommend and suggest. But let’s say you’ve been looking, and you’ve looked at all the properties that are out there, and the ones that have been on the market already and are still kicking around are just not for you, for whatever reason. The issue is that during those time periods, the number of new listings that come out would be very low compared to spring and fall when many new listings are being brought to the market. Data shows us that in the winter months, without question, over and over again is when the inventory and the number of new listings are at their lowest levels throughout the year, and again in the spring, the highest number of new listings are coming to market without fail. So, the likelihood of a new property coming out in January or in August, just as an example, when you’re doing your most active looking, is relatively low compared to something like April or May, or maybe October.
Limitation Number Three: Flexibility of Seller
The third limitation is the flexibility of the seller of the property. For example, sometimes a property has been lingering on the market for a long time because there’s something that the seller is asking for, let’s say outside of price, that might not be very cooperative with the average buyer. Perhaps they don’t want to move out until a year down the road (that’s what we call a long closing), which could deter some home buyers.
Another example is if you’re purchasing a property that’s in rough shape and it needs some work; are you going to move in and then start the renovations while also living in your new home? Or do you postpone the closing date of your current home and move in once the Renos are finished?
Flexibility can be a huge limiting factor for some buyers, but it can also be a bonus if you are currently in a flexible living situation.
Although it can be challenging at times with these potential limitations, I still recommend being an active home buyer in the summer and winter months because they can provide you with some good opportunities if you’re seriously looking to purchase real estate or make an investment property.
Ready to start your home buying search? Start your search with The Pike Group to see current listings.
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