Friday, September 18, 2009

October to April; Best Time to Buy Home

The other day my wife and I were having dinner with a group of friends and I overheard someone with the group at the next table say, “We’re ready to buy a house, but we’re waiting until spring so we can get the best deal.” Really? The best deals are only available in the springtime?

It’s funny how an urban legend gets started.

Statistics at the Oklahoma Association of Realtors website ( support that more homes are sold each year during the second and third quarters than are sold during the first and fourth quarters. This has been true at least since 2002. I know this because that’s as far back as the OAR website displays the data. One quote from that website speaks volumes.

For the second quarter of 2009:”The average cost of a home in Oklahoma has decreased by 3.4 percent compared to Second Quarter 2008. In Second Quarter 2009 the average cost of a home sold was $145,413 compared to $150,559 in 2008. Statewide, 12,130 homes were sold in Second Quarter 2009. This is 11 percent less than the number of homes sold in Second Quarter 2008 in which 13,626 homes were sold. The average Days on Market was 115, and the average Median Price was $106,901.”

If you wait until spring and summer to purchase a home, are you certain you’ll be getting the best deal? Or is it possible that just the just as many good deals and even great bargains could be available during the fourth and first quarters of the year?. Let’s briefly examine the conditions that could make this October to next April one of the best times to buy a home.

High Home Inventory: More homes are available for purchase now than at any time in recent history. Across the state the average days is on the market 115 days before being sold. That’s almost four months. That means that if a home was put on the market in June (one of the peak months for home sales) that same home could very well still be on the market today. And with 11% fewer homes being sold (April through June, 2009) you can expect to find more homes on any MLS database search that meet your criteria.

Time on Market Affects Price: When a home is first listed on the MLS, it receives a great deal of notice from Realtors. But the longer that home remains on the market the less notice that home usually receives. This is why many Realtors suggest dropping the asking price. This kind of change brings the home to the top of the search criteria when Realtors check the MLS.

Don’t Forget Foreclosures: The news is filled with numbers of new foreclosures throughout the country. Oklahoma has its share of these numbers and many of these homes are in good shape and can be picked up for a great price. If you elect to go down this path, make certain your Realtor has experience negotiating a short sale. This is a transaction where the holder of the lien agrees to accept a price that is less than the note they currently hold against the property.

$8,000 tax credit goes away December 1, 2009: There’s still time for first time home buyers to close on a home and claim this tax credit. However, time is running out. Check with your Realtor and your mortgage provider for all the details.

Hungry Realtors: One of the things I love about America is the structure of our economy. Hard work and industry are rewarded by greater income. When fewer homes are being sold, skillful Realtors survive by going the extra mile for their buyers and sellers. Skillful Realtors feed their families all year long by working hard to get you the best deal.

Hungry Mortgage Brokers: The same truth that applied to Realtors applies to Mortgage Brokers. The number of refinances has dropped right along with the number of applications for home mortgages. This motivates the skillful and hardworking Mortgage Brokers to do whatever it takes to get your business and that can include reducing the amount they make on your loan.