Holiday Season time for Real Estate Activity to Stop- Not this year. By, Jim Clifford

people eating holiday dinner

Conflicting Ideas about Selling in the Winter Months

According to US News homes for sale during the holidays are “priced to sell” but according to Trulia home sellers net more money by selling homes during the holidays because buyers are anxious to buy. They cannot both be true. If you google “Why buy a home during holiday season” will show the following:

1. Less competition from home buyers.

2 Motivated (OK, desperate) home sellers.

3. Tax advantages

4. A realistic picture of the house

5. Greater accessibility to professionals

HGTV says selling your home during the holidays is “Not All Bad”. Reasons are

1. Buyers are serious

2. Buyers have more time to house-hunt

4. There are fewer homes for sale

5. Services are more available

6. Homes show better in winter

Selling a Home now Benefits Buyers too!

But this year you can throw all that out because there are financial reasons to buy and sell a home now. All of the news about real estate lately is that inventory levels are rising so there are more homes for buyers to look at, but what they are not saying is that number of transactions has decreased. Buyers are pausing. Some buyers may believe that prices will start to go down. Frankly, that is foolish. Price increases may slow down or pause but there is not a “glut” of inventory to create a turnaround in home prices. What is going up is interest rates and that has a long-term cost increase no matter what happens to the sales price.

Not including property tax and insurance a $300,000 mortgage with 10% down 30-year amortization payment is $1,898 at 4.786%. Now raise that to 5.25% and the monthly payment goes up to $1,990. While $92/month may not sound like a lot, if you own the home over 7 years that is an extra $7,728 it will cost the new home owner. If the rates go up to 5.5% (which is very likely by middle of next year) monthly principal and interest payment will increase to $2,032, or an additional $11,256 over 7 years. Until 2008 the average length of home ownership in Washington State was 7 years. Over past decade that has increased to just under 10 years.

So, buyers you need to get your financing locked in now and find a home to buy. Sellers if you plan on buying another home after selling, if you wait to put your home on the market you will become the buyer who waited for interest rates to go up. Your Christmas present may be moving into your new home for New Years.