If you’re browsing the housing market and find yourself asking the question “when is the best time of year to buy a house,” the short answer is: it depends! We unpack some external effects including the time of year, mortgage rates, and other factors that will help you determine when is the best time to purchase a home.
Pro Tip: Have you locked in interest rates? Saavy home buyers should have taken advantage of the low interest rates and would (or should) have locked them in, (typically for up to 120 days). If you haven't click here to jump into our mortgage approval form. We'll get you in front of the top mortgage partners we work with and have them assist you in locking in the best rates in the market, and helping you understand how much home you can purchase.
While seasonality is definitely something to take into account when you’re looking for a good time to buy a house, it’s only one aspect of many to consider. Before getting into how different factors can affect your decision, it’s important to know a bit about how the time of year relates to the housing market.
Is there a best season to buy a house?
As a rule of thumb, seasonality tends to affect the number of homes for sale and their sale price. For example, there are generally more homes for sale during spring and summer in comparison to the fall and especially winter. The economic driver of supply and demand then comes into play, in a hot summer scenario, buyers often outweigh the sellers, which is what we've seen happen early on in 2021 through the first quarter. Our supply has remained low while demand has increased, this is kicking off many bidding wars, and is a catalyst for the rise in prices we're seeing across many different property types in various price ranges.
What time of year is the cheapest to buy a house?
As mentioned, home inventory is generally reduced during the winter seasons, along with demand from home buyers, which generally results in lower prices. While winter is often seen as the cheapest time of year to buy a house, moving in winter also comes with its own host of challenges and disadvantages. Also, some buyers who don't need to sell, may be content with their pricing and position in the market. With low competition, their home, especially if it checks a lot of the commonly desired boxes and is move in ready, may sell quicker than usual with less homes to compete against and less options for buyers who need to move to select.
Even with seasonality affecting prices and inventory, the best time to purchase a home shouldn’t necessarily be dictated by the number of homes available or their price. Other important factors such as market conditions and your personal requirements should play a role as well.
The good news is that you can generally find homes for sale all year round, so it’s up to you to understand the risks and benefits of buying at different times of the year.
Buying a house in the winter: Pros and cons
We’ve established that as a general rule winter can often times be the cheapest time to buy a house. Sellers are particularly motivated during this time, which can bring advantages for you, the buyer.
December is typically the slowest month in terms of real estate sales. Starting around the middle of November and into the New Year, sellers will often consider suspending their listings, assuming that they will receive little to no interested buyers. Any listings that do come up during this time would typically indicate that the seller is very motivated to sell as soon as possible. This could be an opportunity to leverage more in the negotiation of the deal, such as appliances, hot tubs, and window treatments.
On the other hand, your selection is much more limited during the winter. You might be able to find a deal, but you’ll have much less inventory to choose from to find your dream home. In addition to fewer listings, you’ll find less open houses during the winter months. Depending on how harsh the winter is, you often won’t see homes at their best. That may cause you to pass on a property that you would have otherwise loved in the spring or summer months, when the snow is gone and there is more natural light.
Heavy snow cover could also cause difficulties with inspection, especially when it comes to the roof. Cold weather might also prevent you from properly testing the AC system. It’s no secret that winter home buying poses a number of challenges.
Expired listings are another indicator, commonly more listings are expired (taken off the market) in the winter months, further limiting your options as a buyer.
Buying a house In the spring: Pros and cons
In contrast to the slow winter, spring is an active time of year for the real estate market. Whether it’s the warmer weather or the end of the school year, spring typically sees an increase in both sellers and buyers, creating a lively market.
Of course, there are pros and cons to this if you’re looking to buy a home. In short, you’ll have more homes to choose from, but so will your competitors. There’s a higher chance of finding yourself in a bidding war during the spring.
Generally speaking, home inventory and sales tend to increase as temperatures rise because houses look their best during the brighter, warmer months: lawns are green, trees and flowers are in full bloom, and plenty of sunlight will make a house just look better. Spring also follows the real estate lull of winter, creating a pent-up demand for homes. This leads sellers to set prices high during spring, which can lead to a hot market environment rife with bidding wars. Despite this rise in prices, buying in the spring remains popular for a lot of people. It’s a convenient time of year for families to shop around together and plan their move. If you’re set on buying a house in the spring, be aware of what you’ll be up against and move quickly!
Buying a house in the summer: Pros and cons
Much like spring, summer is an active buying season. However, towards the end of the season, real estate activity does taper peak and begin to tapper off. If you can hold off until late summer, you might be able to find a deal. September is usually the month during which things start to slow down, this is usually due to families getting their kids into school and the stresses and weight of summer ending.
When the market is hot, sellers want to go with buyers who are serious about closing the deal. If you need to sell your home to buy a new one, this may not be a great time to do so. There are more buyers looking around, meaning you’ll have a better chance to time the sale of your home with the purchase of a new one, you'll also be positioned against these other buyers who could come in with another offer forcing you to waive conditions or lose out on the home. In winter, sellers receive less offers and are more likely to entertain trickier deals.
If you wait until late August, you might find houses that have stayed on the market during the spring and early summer months. While it might be tempting to overlook them, it’s always worth keeping an eye out for potential deals. You never know the reason a house didn’t sell, it could have had multiple offers or deals in place that fell through due to financing not being waived. If you keep an open mind and ignore the days on market, you could come across a great find. Dusko Sremac our team leader, helped an investment client purchase a great home well below market value in West Hillhurst during the middle of the fall. The sellers had kept the price too high throughout the summer months and tried to bring their price down to match the declining interest and sales heading into winter, strong negotiations, and sellers who had backed themselves into a need to sell resulted in a sale below list price, and well below market value.
Buying a house in the fall: Pros and cons
Along with winter, fall is a slower season for real estate. Once summer comes to an end, sellers typically start to become more motivated to close deals. This can result in lowered prices, more perks and an increased willingness to negotiate.
Much like in the winter, the fall season sees a drop in housing inventory. You’ll have less selection to choose from as most people want to avoid having to move during the holiday season. This could create opportunities for negotiation. Fall also sees less interested buyers. Most people want to be moved and settled before the school year starts, which is why spring and early summer are such active real estate months. This activity only really picks up the following spring, so waiting until late fall (say October) could present interesting deals as sellers start to get desperate. This is especially true if they want to sell their house before the end of the year and the holiday slow down.
When it comes to purchasing a home based on typical seasonal influences, generally speaking, if you're a buyer who's looking for more options and variety, you're better off to wait for the spring / summer months as inventory will be the highest, but keep an eye in the fall / winter months.
Winter home buyers will have less options, but typically more negotiation power, especially as the days on market begin to compound, the pressures of selling begins to force sellers to become more negotiable.
What is the best day to purchase a home?
In terms of writing an offer on a home, sellers typically receive the most offers and activities on the weekends. In a hot market for sellers, you'll even see scenarios where a home is listed and marketed on a Thursday and will not accept offers until the end of the weekend.
The importance of the day you purchase isn't quite as important as others dates (like your possession date). In our experience, you are more likely to find yourself in a multiple offer scenario in the hotter / more active markets, when writing on a home on the weekend vs during the week. The weekends draw out far more buyers, and open houses are far more common. Ultimately though, you're really at the mercy of your needs and inventory. If there's plenty of options in your desired list of homes you're likely to be good writing any day of the week, however, if there's a very short list of homes available and/or only a few hit the market here and there, you need to act fast, and the day you write should come sooner rather than later.
In today's market especially, we're seeing more and more sellers take control and advantage of the sellers market. Picture this, you have a great home, renovated, in a highly sought after area and you know that it's going to generate a lot of action and buzz, you list it Thursday, and as the bookings and showings roll in, you let interested agents know that you'll be accepting and reviewing all offers by Sunday night. This gives your home a decent amount of time to soak and generate interest, while not scaring away buyers with lengthy consideration periods.
When you're ready to write on a home, your agent should discuss with you what day is the best for possession, it may not seem important, but any complications on a Friday close could result in keys not being released and everything you scheduled (Movers, cleaners, etc) may have to be adjusted.
Our recommendation: What day you purchase a home shouldn't have too much effect on the price and outcome, putting an offer in during the week may get you ahead of any potential multiple offer situations that could arise from the rush of weekend home buyers.
Is there a bad time to buy a house?
We'd be lying if we said there wasn't! While the market conditions may vary from day to day and week to week, one thing remains consistent (Especially in Calgary) and that is, certain times of year the city and market really slows down, deals take a bit longer to put together, and vendors are busier. Stampede is known to shut the city down in the first days of July, while homes are still bought and sold in the city during this time, we definitely see a decline in showings with our buyers and on our listings. Closing during this time can also pose challenges, corporate events happen daily and proper care and consideration with elements of your purchase (condition dates for example) should be considered thoughtfully by your REALTOR® The same can be seen during the holiday seasons.
It can also be tough as a buyer to get into homes for showings, whether it's bad weather, holiday events, etc, buyers who need to move with urgency could hit some hurdles with sellers who are moving in a different pace.
Other factors to consider when buying a house
While seasonality is clearly an important factor in determining the best time to buy a house, there are a host of other factors to consider.
Below are a few more reasons to keep in mind when making your decision on when it's the best time to buy a home.
The housing market
We’ve explained how the housing market can fluctuate with the seasons, but other forces can also have a profound effect on house prices.
Mortgage rates are one important factor to keep in mind. They are driven by the Bank of Canada's prime lending rates, which is set by the government and can change depending on economic conditions (such as the slowdown caused by the COVID-19 pandemic). It’s important to keep in mind how mortgage rates will affect your finances in the long run. For example, any savings you might have gotten from a lowered purchase price might be offset by higher interest rate, or vice versa, taking advantage when interest rates are historically low and paying a slightly higher price (today's current market trends) Interest rates are quite low at the moment, which means that many home buyers are looking to take advantage of the potential savings. This increases demand and heats up the real estate market in general.
When it comes to identifying trends, remember that housing markets vary locally. Some cities or even neighborhoods can be way more sought after than others, creating trends that differ significantly from the overall market. These “hot” zones typically see much higher prices and lower inventory.
So far, we’ve only covered external factors such as seasonality and market forces. At the end of the day, you need to make sure that you are ready to buy a house.
Ensure you have good credit and that you’ve gotten any debt you have under control. It’s also crucial to have a secure source of income. Finally, be prepared to tackle any costs associated with being a homeowner. Beyond your finances, you’ll also want to make sure that you’re comfortable committing to living in a specific area, and that your lifestyle fits in with that choice.
There’s no way around it: buying a house is a huge commitment. Finding out the best time of year to buy a house is important, but it’s only one part of the process. As we have seen, each season has both pros and cons when it comes to buying a house, from inventory to competition to prices.
Armed with that knowledge, you’ll be in a better position to find your dream home once you are ready to take that step.
Purchasing Based On Inventory Levels
Calgary's Inventory levels are some of the best ways to determine what's going on with the market, and where you're positioned to be as a buyer. Inventory is both a function of new listings, as well as sales. Some buyers simply focus on how much is selling, or how many new listings are hitting the market. This is also known as the liquidity of the market, by knowing the liquidity of our market, you can be better positioned in your negotiations. We can also calculate 'months of inventory' this is done by calculating how many active listings we had last month, and how many sales we have in one month and then dividing the active listings by the number of sales.
All things considered, and speaking from previous statistics and data (do not use this as a guide for future markets as they evolve rapidly) the best time of year to buy a house generally is in April, May, or June and even July if you're looking for the most options, this is when inventory usually begins to rise and typically the most advantageous time to get a good deal. November and December months will typically land you with a lower overall price and more negotiation power.
In most instances, timing the market is incredibly challenging. If you happen to fall into a position where the market booms (and you're holding multiple properties) or crashes (and you're renting) pinpointing the perfect time to purchase is incredibly difficult and you're more likely to fall back on your own personal motivations and capacity to purchase.
Start Your Home Buying Journey With Your Mortgage Approval
Posted by Calgary Homes Real Estate Partners Team on