3 Questions Homeowners Are Asking About Selling Their Homes This Winter
That rising mortgage rates have deterred many potential homebuyers over recent months is no longer news. But with winter upon us, it’s bringing a new set of questions for those looking to sell their homes.
Are buyers still out there? Should I wait until the spring? If I sell now, can I afford to buy my next home?
Sellers are posing these questions for good reason. They know that real estate is a seasonal business. Just as the leaves change color in the fall, winter brings with it a different dynamic for the housing market. There’s typically less demand, fewer showings, and slower transaction closures between October and February.
But that shouldn’t dissuade all potential sellers from listing their homes on the market. Despite the seasonal shift, there are still opportunities for those looking to move before and after the holidays.
Let’s take a closer look at each of these questions, as well as the data that may help answer them.
Are Buyers Still Out There?
Yes, albeit in fewer numbers. According to the Mortgage Bankers Association, mortgage applications saw a 28.6% decrease in October 2022 compared to the same period in 2021. Again, it’s no secret that rising mortgage rates have led to a drop in foot traffic, with some buyers waiting to take advantage of lower rates or simply “sitting it out” until the market stabilizes.
But that doesn’t mean buyers won’t be out there. Those who are motivated and prepared to purchase will continue to look for their ideal home and make a move sooner than later. These motivated homebuyers include millennials, who make up 43% of buyers nationwide. Others have no choice but to buy, such as those transferring for a job or needing more space to grow their families.
Should I Wait Until the Spring?
The answer to this question is less straightforward. On the one hand, spring is typically the peak season for real estate. More buyers flood the market during this time, allowing sellers to take advantage of a more competitive environment and potentially drive up their home prices.
On the other hand, some buyers are looking to buy now and won’t wait until spring. By the same token, some sellers may be in a hurry to sell and unable to wait out the peak season. With these factors in mind, listing a property in the winter may turn out to be the right move, especially now when housing inventory is still low. Meanwhile, mortgage rates are also hovering at a historical low compared to 20 years ago, so buyers may find that this winter is the ideal time to buy.
If I Sell Now, Can I Afford to Buy My Next Home?
Given the rise in home values post-COVID, many sellers are finding that they have more equity when they sell their homes than expected. With higher sale prices, some sellers may be in a better financial position to purchase their next dream home, even if mortgage rates have had a sluggish rise.
Ultimately, the decision to sell in the wintertime is highly nuanced and personal: Is the seller ready to make a move? What are their long-term financial goals? Now that there are fewer buyers, and consequently more negotiation power returning to the buyer, what’s their best-case scenario? Would the seller be willing to negotiate the terms of the sale, such as keeping most of the contingencies in place, extending the closing date, or offering concessions?
Answering these questions and understanding the current market dynamics are key to making a successful winter sale. More importantly, working with an experienced real estate agent can help sellers understand the process inside and out, including how to weigh their options for the best possible outcome.
The Bottom Line
Winter isn’t necessarily a bad time to list a property. Although there are fewer buyers on the market, there’s still an active community of motivated buyers who are ready to purchase a home, regardless of the season. As long as sellers go in with the right plan and understand the market conditions, there’s still an opportunity to sell their homes at a favorable price.
Reach out to an Elegran advisor today for more information on how to make the most of your winter sale.
