When Is The Best Time To Buy?
[Originally published September 6th, 2019]
Greetings folks! Do you know what is considered the best time to buy a house? Ask ten different experts and you’ll get ten different answers, but I’m writing today to give you the real answer backed by stats (and a few years of doing this stuff).
A few years ago, the National Association of REALTORS accumulated MLS data from across the country and determined October 18th was the best - and oddly specific - date to buy a house.
Let’s back up a bit. Buying a house is different from putting one under contract, so that means closing on October 18th means you’ll have put the property under contract roughly a month prior. Yes you *could* take that to mean you should get up from the computer and write an offer on something today, but please rest easy if you’re not quite ready to go.
Why is this the time to get a place under contract? It was determined October 18th is, on the national average, the day of the year that properties close for the largest percentage under the asking price. This also correlates to Northern Colorado as well, and I made the (fortunate for you) mistake of going down the stats rabbit hole to see if we were in line with the rest of the country, and we are. October of last year saw houses selling for nearly 3% under the asking price on average in Fort Collins, with our previous November, December and January at 99%, 98% & 98% respectively, and the same for the two years prior. The rest of the year houses typically sell for 100% of asking price, and some of the busier summer months over the last couple years have been 101%+. Townhomes and condos, statistically, don’t change the numbers much in terms of list price v sales price but of course the median and average sales prices are drastically different - more on that in a minute.
So why do PSL-season purchases sell for less? There are many reasons, but mainly it’s just SLOOOW this time of year. The cooling of the market typically starts right after the 4th of July as folks squeeze in their vacations, followed by settling down to get ready for school. This is combined with the busy early summer activity that breeds “me-too” sellers. They see their neighbors selling for what they perceive as ridiculous prices, so they throw their houses on the market, typically in haphazard fashion and at the end of the busy season. These ill-advised sellers have missed their opportunity, leaving more inventory for lucky buyers. Buyers that are also in short supply this time of year.
This is actually illustrated in a graph on the stats page of my website. The rest of the graphs on the page are interactive, if you’d like to take a few minutes to see how our market has moved over the last 3-4 years. Note the peaks and valleys that indicate the ebb and flow of seasonality, which is really just days on market.
Before I provide my last example, take a guess at what the average price house in Fort Collins is right now. Got it? Now highlight the bar here to reveal the number $455,000. Higher than you thought? Again, don’t fret. Some wonderful clients of mine currently have a property under contract that, on paper, is a very average FTC home: 4 bedrooms, 3 bathrooms (including a master bath), 2 car garage, almost 1900 sq ft, fenced yard, mid-town location. New roof, slightly below-average condition. Not only is this house listed for 25% less than the FTC average price, they’re getting it for 4.5% under THAT.
Some kudos go to their brilliant agent of course, but I don’t believe we could have pulled this off in June.
Speaking of brilliant agents, I’d also like everyone to welcome the wonderful Deborah Alexander to the Erickson Realty fold! Learn more about her here. Of course, please let Deb or I know if you’d like to take advantage of the current market as a buyer, or start planning for the selling season next spring. Thanks for reading and we look forward to hearing from you!!
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Crip Erickson, Owner/Managing Broker