As we enter 2014, there is renewed optimism in the real estate market. Varying expert sales forecasts have somewhat tempered expectations, but new residential construction activity and solid existing home sales hint at continued market strength. While the number of sold houses over this summer and holiday season has not increased in comparison to the last few years, the median and average sales prices have. This year’s winter lull is looking rather typical.
The middle of November to the middle of January is roughly considered the holiday slowdown in real estate. A lot of buyers like to avoid holiday distractions. Preparation for Thanksgiving Day and cleanup following New Year’s festivities seem to take precedence over house hunting. The drop in homes sold from the height of summer to the holiday months is usually about 10-15%. The slowdown can be as much attributed to the distracted agent as the preoccupied consumer.
Over the last four years, there hasn’t been a huge difference in home prices from the summer to winter months. The active 2013 summer market saw more buyers than sellers—driving prices higher. November and December have experienced a slight increase in inventory, but prices are still trending upward. The holiday slowdown refers mostly to a decrease in closed sales and new listings. Even the housing bubble years of 2005-2006 followed these trends. Across the Valley, the holiday season of 2005 actually saw residential sales drop by closer to 25%—a dramatically higher percentage than seen in recent years.
That is not to say that real estate transactions are nonexistent during the holidays. A home purchase is a significant event. Buying a house as a Christmas gift is a rarity, but it does happen. I have personal knowledge of a group of family members buying a house for their mother as a present. I also know of several agents who have been involved in deals where escrow was purposely scheduled to close just before the New Year. There is no best time to buy a home, so purchase on your own schedule.