Is Buying a Home in the Winter a Good Idea?

I wasn’t born in Canada. Know-it-all-Englishman coming through!

I am Canadian, so obviously I cried when Sidney Crosby scored the winning goal in the Olympic finals.

But there’s one thing about natural born Canadians that I’ll never understand:

“Oh, no I couldn’t move house in the winter!” - Any Canadian

I really don’t get it. So I ask them “why not”? I always get back a mumbling answer about snow and cold, and the physical act of moving. Something about having to have the door open and keep putting your boots on and off.

It’s part of a bigger thing I don’t understand about Canadians which is an aversion to bad weather. If you hate snow so much (or God, forbid, RAIN!) then why, might I ask, did your forebears come here!

Of course, I’m joking.

But seriously, is buying a home in the winter months a good idea? Let’s see:

[Before we get started, check out the fun disclaimer in the footnote.][note]The interpretations of the MLS® data are my own and don’t reflect the opinions of the Fort McMurray Real Estate Board or its members.[/note]

Seasonal Cycles

Our real estate market is cyclical:

1) The national housing market is economically cyclical (interest rates, credit).
2) The Alberta (especially Fort McMurray) is dependent on the commodity super-cycle.
3) The natural world (and our school calendar) affects the real estate market.

If not much is going on in 1) and 2), then 3) will dominate. But regardless of what is happening in 1) and 2), our housing market is impacted by 3) (seasonal changes in our market operate in the background). In the last few years (true also this year), there has been so much change in 1) and 2), that 3) has not been very noticeable.

People like to buy and sell homes in the spring and summer months. Maybe it’s because they like to see the landscaping, or maybe because they want their kids into the new home long before the school year starts, or perhaps it’s because they don’t like cold feet when moving.

What am I talking about? I’ll explain, but first, let’s look at 2017 new listings and sales:

New Listings And Sales in 2017 So Far[note]All properties types have been selected. The data in all charts and analysis covers only the following areas: Abasand, Beacon Hill, Dickinsfield, Downtown, Eagle Ridge, Grayling Terrace, Henning Ridge, Parsons North, Prairie Creek, Stone Creek, Thickwood, Timberlea, Waterways and Wood Buffalo[/note]

This year has been fairly typical and as you can see in the diagram above, most people list their home in the first eight months of the year, with the peak, usually in April or May.

So that’s new listings. Now let’s look at sales activity:

From the above diagram, we can see that most homes sell between February and June. Some years (about 50% of the last ten years) we see a fall bump, but just as often we see a “shoulder”, as we have this year, during which sales don’t rise or fall from late summer levels until we get into the worst of the winter (December, January).

New listings and sales are highly correlated. Quality inventory drives sales, and the promise of sales causes people to want to list their homes for sale.

Inventory & Quality Inventory

But what about the stock of available homes over the year? What does that look like?

Listings and sales (as well as expiries) combine to give us an inventory of listings on the market at any given time. For example, at the time of writing, we have 708 homes listed for sale in our urban market area. This is the selection of homes that buyers get to choose from.

As you can see, choice is more in the summer and less in the winter.

Since the best properties sell the most quickly, it makes sense also, that the vast majority of quality listings are available in the summer months.

Investor vs Consumer

You may be thinking of buying a home. If so, you might be doing so for purely financial reasons, to enjoy life now, or for a mixture of both.

We generally find that consumers tend to have more success during the summer months, when they are likely to find just the perfect home. There is more good stuff out there, but be aware also, that there are usually tons more buyers. Sometimes in showings, you can almost smell the last guys. Not a great feeling!

On the other hand, those looking for the best deals, might like to buy during winter months, when prices can be lower (all other things being equal). The reason prices adjust seasonally is because while inventory cycles down slightly in the winter months, sales take a real hit, especially in December and January.

So is is buying a home in this season a good idea? It depends on who you are (and why you are buying). It also depends on other things going on in the marketplace...

A Lot Going On Right Now

Be careful not to read too much into this one article, because it applies best to balanced markets (right now we are in a buyer’s market - prices are falling due to non-seasonal reasons). I really just wanted to write this just to open up people's’ minds to another dimension/cycle you might not have thought much about.

To better understand the market, we recommend catching up by checking out our previous blogs on the topic:

Fort McMurray Real Estate Crash: A Timeline
Fort McMurray Housing Market Recovery: 8 Signs to Look for
The Effect of Oil Prices, Employment and Interest Rates on the Fort McMurray Housing Market

If you’d prefer to chat in person, we have specialist buyer’s agents, trained to look after YOUR best interests, so don’t be shy to reach out to us. We’ll look after you like family.

 

via GIPHY

If you’re a chicken and don’t want to move in the winter, try not to panic. We’ve been known to help clients move every once in a while!

The blog post Is Buying a Home in the Winter a Good Idea? is republished from https://ateamymm.ca/