Historically, the housing and mortgage markets cool off in the winter as consumers turn their attention to other priorities such as the holiday season. And, let's face it, there is not a lot of fun to be had sloshing through snow, slush and ice to look at properties. But for those who are willing to pull on the galoshes and wrap the muffler a little tighter around their necks, winter could be an excellent time to buy. Here are some reasons why not waiting for spring may be just the ticket:
1) Interest Rates-We saw what happened last summer when the Federal Reserve even mentioned tapering off buying mortgage bonds-rates shot up 3/4 of a percent in a ten day period. The Fed had to do a lot of backtracking to assure everyone that the possibility of tapering was next spring-not now. If even the mention of tapering off the bond buying program is enough to make rates increase, you have to figure that when the Fed actually does begin to buy fewer bonds-rates are going to go up and go up quickly. Right now conventional wisdom is that this will happen in the spring of 2014. So buying now while rates are lower is a good plan.
2) Home Prices-Typically homes that have been on the market for awhile have taken or will be taking price reductions. Added to that is the fact that sellers aren't excited about keeping their homes on the market through the holiday season and winter and may be more negotiable and willing to pay closing costs. During the spring market, optimism reigns and listing prices out of the gate are normally higher. You may be able to find a good deal by shopping in the winter.
3) New Construction-If you are considering building, while construction may be hampered by winter weather, winter is an excellent time to lock in pricing for a home that is to be completed in the spring. Building suppliers typically take price increases in late January. So best to get your building contract signed and pricing secured for a late spring or early summer close.
4) Time and Attention-During the winter since activity is down, real estate professionals have more time to focus. on.you. Whether it is your real estate agent, mortgage lender, whole house inspector, title agency or availability of appraisers-with less traffic all of these people who make real estate transactions happen have more time to devote to the details of getting the job done. It is much easier to address the needs of five clients adequately, so take advantage of that.
5) Changes in Federal Finance Reform-We are not done with theDodd-Frank Financial Reform and Consumer Protection Act yet. We are still dealing with the consequences of the mortgage meltdown in 2008. This January brings new changes to mortgage qualifying-tighter debt ratios, and a larger burden of proof on consumers with regard to assets and employment.
So while the idea of shopping for a home in the winter may not sound appealing, smart buyers are out looking for good properties at great prices.
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