House Hunting in Winter (days on market, transplants, for sale)

[Steve Bowen]

I know that "home buying season" runs from May to October and that's when the majority of homes are listed for sale. What if instead of house hunting during that time of the year and competing with legions of other prospective home buyers, one looked for a house in the dead of winter - January or February, say?

Obviously there will be much less inventory, but there will also be a lot less competition. And it doesn't seem like you'd want to list a home for sale in the dead of a Minnesota winter unless you really had to. I'm thinking most prospective sellers in January or February are going to be very motivated. It seems like this combination would provide a prospective buyer with a lot more leverage than they would otherwise have.

Has anyone actually tried this strategy? How well do you think this would work in MSP?

[Camden Northsider]

I mentioned this in another thread recently to someone that posted about all of the stiff competition in my neighborhood and running into multiple offers situation. I think if you have the luxury of choosing when to buy a home, and you are comfortable with a smaller inventory to choose from, the dead of winter would be an ideal time to negotiate a purchase where you as a buyer want some more leverage.

With that said- this year in my neighborhood at least, the spring blitz seemed to start much earlier (late Feb/March), and the market shows no signs of slowing down yet at the beginning of October. This feels pretty unusual where we're at- last year things seemed to start dropping off after the 4th of July and were pretty dead come mid-September. Another thing to keep in mind with this strategy related to inventory- as there are a lot of sellers out there who are advised by their realtors to list in Spring to get top dollar, the quality of homes in whatever area you are looking might not be as good, on average, in the dead of winter compared to Spring/peak seasons as people that can afford to wait likely will (so your limited inventory might also have a higher than average amount of fixers). But I can think of a few friends who got great homes for a song compared to the prices they would have paid had the previous owners waited to list in Spring- a short sale on my block last winter would have easily commanded $50K more this past spring.

[BryaninMSP]

It depends a little bit on the style of house, neighborhood, city, price range, etc. The Twin Cities market never really takes a complete rest, only little catnaps. With job transplants, people without kids, people looking for a better deal, etc., houses sell here every day. An easy stat to look at to determine the tone of the market is "months of inventory." We could analyze median sales price, active listings v. sales to figure out listings per buyer, etc., and if you let me know what particular area you're looking in that would be a lot more meaningful, but months of inventory is a simple and mostly accurate indicator of whether it's a buyers' or sellers' market.

A "balanced" market is typically defined as 6 months of inventory, though I would say the balance in the Twin Cities since we're traditionally a very active market would be closer to 4 months. There are other realtors on City-Data from the area who could probably weigh in — at least in my side of the Cities, a listing more than 6 weeks old starts to lose its leverage over buyers. (To clarify, I'm not saying that months of inventory and days on market are the same, just saying our market is always a little more active than the national average, so 6 months of inventory would feel like a totally stopped market around here).

So, looking back from January 2013 to now, here are the averages for the Twin Cities core (lower numbers = better for sellers; higher numbers = better for buyers):

January: 4.33 months of inventory
February: 4.33
March: 3.33
April: 3.00
May: 2.67
June: 2.33
July: 2.67
August: 3.00
September: 3.33
October: 3.50
November: 4.00
December: 3.00

Bear in mind that these numbers are based on closings...so are not totally accurate. A lot of the closings in January were likely under contract late November to early December.

Looking at median sales price, it looks far more dramatic, but these numbers are likely skewed by the types of buyers (first-time buyers without families tend to by less expensive houses than families with young kids, for example). Average median since 2013:

January: 173,367
February: 179,329
March: 190,267
April: 197,000
May: 208,967
June: 219,833
July: 213,300
August: 215,317
September: 205,933
October: 197,500
November: 195,625
December: 191,925

My suggestion is to use the anticipation of January to your advantage and make offers in December. In January sellers are already starting to look at spring around the corner, and might be willing to "wait it out." The really low January median prices were likely for offers made in late November, early December. You can see by March it already starts to pick up.

My two cents.

[Hotfeet]

I think the advice above is spot on, and if you have time to do research about home prices now, you will be in a good position to pounce in Dec or Jan. Another advantage is that you may be able to check for potential ice dam problems.

[uptown_urbanist]

I think it would depend on your needs and wishes. We were only interested in a very small geographic area, and with a very small budget for the area, and so even in the height of house season there were only a few options on the market that met our wish list items (if we hadn't found something we would have just waited, and would have kept an eye on things until something did come along... whenever that was). I assume if you're not as picky, you'd have a much better chance at finding what you want. And I'd take BryaninMSP's advice to heart if looking for a real strategy.

[maui-intoxicated]

This is our 3year plan. We plan on looking for a home and a lot simultaneously for the next three years. I don't think the competition is as stiff in our range of 400-600k.

It took us all summer to find a house and we ended up in a multi-bid situation (unless the listing agent lied) which drove my final offer up about 5k on a 400k home.

our annual income is 130k combined and we save 22% of that off into retirement accounts before paying any bills.

[Old Prospector]

lots of homes for sale in lakeville this winter. please make sure to avoid the sudden valley subdivision .