The temperature has dropped here in College Station. The sun sets a little bit earlier, the leaves are changing, and you’re dusting off that winter coat that’s been hanging in the hallway closet for the last 8 months. It’s wintertime here in Central Texas.
In a lot of my day to day conversations during this part of the year, I get asked how the holidays impact the real estate market and whether or not it’s a good time to make a real estate transaction.
How the Holidays Impact the Real Estate Market
The real estate market is cyclical and seasonal. For the real estate market, we tend to see a lot of activity during late Spring and Summer months. During the holidays and the new year, we typically see a lot less real estate activity – it’s often called our “slow season.”
There’s a reason that the real estate market cools down during the holiday season: people are busy with their lives.
Think about it. Most people are wrapping up their year at their job, making travel plans, celebrating the holidays in one way or another. For some people, money can be tight at the end of the fiscal year. All of those factors contribute to people not wanting to sell or buy houses.
Conversely, during the Spring and Summer months, folks have the bandwidth to make a move. The school year is over so people are open to changing school districts with their kids. It’s a much more convenient time to make a big life decision.
Ultimately, the real estate market sees a lot less activity during the holiday season. Fewer houses go on the market and there is lower demand for housing in general. There are a lot of reasons why the real estate market is quiet during the last two months of the year:
- Buyers want to feel settled in their home and don’t want to undertake a move during an already stressful time of year
- Sellers don’t want the hassle of having open houses with people coming and going during the holidays
- The school year is at the midway point and people are less likely to move school districts outside of summer break
- There is less competition in general so sellers likely won’t receive high or over asking offers due to there being less demand
If You’re Smart, the Holiday Season is a Good Time to Buy
So we’ve established that there’s just a lot less activity in the real estate market during the holiday season. But do you know what also happens? Mortgage interest rates drop.
Because of the decreased demand, banks lower interest rates to make refinancing or loan initiation more appealing to buyers. This means that you’re more likely to get a lower premium on your home mortgage by buying a home during the holiday season than you would when the market is saturated.
So when is the best time to pull the trigger?
According to a recent article by HousingWire, tech startup Haus “found that the sweet spot for rates is typically in January, when mortgage originations also typically slump.”
The holidays can be a stressful time, so embarking on buying or selling a house might not be in the cards. However, with the recent increase in mortgage rates on the national level, you may want to take advantage of the lower seasonal rates you can get during a real estate slump.
If you’re currently in the market for a home in the College Station area, please contact me to get up to date listings and expert insight into all the available homes in the BCS area.