Are you looking to buy a home but are weighing the pros and cons of purchasing in the winter months?
There are plenty of reasons to not buy when there is over 12in of snow on the ground. And Minnesota winters can get pretty brutal,making moving that much more inconvenient. However, when you spend more time inside you are more likely to want to make changes to your living situation.
This blog will cover the pros and cons of buying a house in the winter to help you make the most educated decision on when the right time to buy for YOU is.
cons to buying in winter
Con #1: The Weather
The first con of purchasing a home in the winter, is directly tied to the weather. Severe winter storms can impact moving timelines, delaying movers, rescheduling home tours, etc. It is also more inconvenient to have to strap on your winter boots to tour homes.
Con #2: Limited View of the home
Another major con to purchasing a home in the winter months is you have a more limited view of the home. Not only from the exterior, such as landscaping but also areas that are pertaining to the home inspection.
Home inspectors aren't able to analyze the quality and lifespan of the roof in the winter months because they will be coated with ice and snow. They are also unable to test air conditioning units if the temperature is below 65 degrees. (But one great thing about the air conditioning unit, is if the seller claims that it is working condition on the seller's disclosure, and the summer months roll around and it's not working, you have a leg to stand on to ask for financial compensation).
Con #3: Less Homes available to choose from
The last major negative is that we see reduced inventory and less new listings added on between the months of December and February. Think about it, sellers don't want to pick up and move during the holiday season or deal with the winter weather. But also if you are considering single family homes, the sellers may have children. And they won't want to have the added stress of moving a kid in the middle of the school year. So most sellers will choose to wait to sell in the spring.
Here you can see the trend line for the Total Inventory of homes in the Twin Cities region at its lowest between the months of December and February.
Now if we pull up New Listings that are added, you can see that the trend the line is much more dramatic, with the absolute least amount of new homes being listed in the month of December. With less homes to choose from, it may be more difficult for you to find the perfect house.
Pros to buying in winter
The overall greatest advantage of purchasing in the off-season here in the Twin Cities is less competition in the market. Less competition impacts:
- Your negotiation power
- Home Sales Prices
- Days on Market
Pro #1: Negotiation power
When you are not battling against multiple offers on a home, your negotiation and leveraging power increases. Sellers are more likely to meet you in the middle. This gives you flexibility to ask for pieces in your offer that make a direct impact on your buying experience.
- Repair Requests: you can not only request a home inspection, you might also be able to ask for repairs.
- Financial concessions: For first-time home buyers this is a significant piece of the buying process.
- If you are hoping to bring less cash up front to the closing table, one way you can do that is by asking for up to 3% back in seller paid closing costs. Say you are purchasing a $300,000 home in the Twin Cities. 3% of $300,000 is $9,000.
- Or you could request that a seller pays for a 2-1 buy down program to drop your interest rate by 2% in the first year, 1% in the second year and then by the third year you are paying the full interest rate. If at any point during those three years interest rates drop, you have the ability to refinance the loan, paying a lower interest rate and having a lower purchase price on the home.
- Time: To be a first-time home buyer, it means you can't already own a home. And you are most likely in a rental space. If you are trying to avoid doubling up on a mortgage payment and your rental payment in the same month, you may have more flexibility to ask for a seller to close on a pecific date that makes the most amount of sense for you and your payments.
pro #2: lower home prices
Less competition in the market also makes a direct impact on sales prices here in the Twin Cities.
Here you can see that over the last 10 yers, home sales prices are at their lowest from December to February. And the percentage of asking price also reduces in the winter months. This means that if you are house-hunting between the months of December and February, you are more than likely going to pay less than the sellers original asking price.
pro #3: longer days on market
Finally less competition impacts the days on market. This gives buyers the opportunity to take more time when making a final decision, and it allows them to potentially see a home more than one time. Have you ever tried on a piece of clothing in the store, brought it home and then didn't like it? Seeing a space more than once can make a big difference when you are up in the air between options.
Now that you have both the pros and the cons of purchasing a home in the winter months, you can decide if it is a good time for YOU to buy. At the end of the day statistics, trend lines, none of that matters if you are not in a position where you feel comfortable making the financial investment.