Great deals in real estate are made in the winter. The Alaska Purchase, which saw the United States acquire the territory at 2 cents per acre from a cash-strapped Russia, closed escrow on Oct. 18, 1867. Manhattan was purchased from the island's natives for the equivalent of $24 in May 1626, but the idea was hatched when the buyer, Peter Minuit, was appointed director-general of 'New Netherland' in December 1625. With his pre-qualification in hand, Minuit set sail to secure a deal. And the rest, as they say is history.
The winter is a home buyer's best ally. The winter market sees fewer buyers than summer months. With less competition, buyers are able to offer more aggressively without the fear of multiple offers and a biding war. Recent sales during October are showing that home buyers are securing as much as 5 percent off the listed asking price. A significant difference from the 2-3 percent discount from April to June this year.
In Carlsbad, average market time has increased to more than 80 days with average sale prices about 5 percent less than the summer months during this year. During a 30-day winter period, 74 homes went under contract, compared with roughly 100 during a similar 30-day period in the summer. This follows the historical trend of a decrease of roughly 30 percent in sales during the winter months.
And this winter market may see continued slowing as the extended conforming loan balance amounts have moved down to $546,250 from $697,500 as of Oct. 1. The expiration of the higher loan limits, set by the Federal Housing Administration, will reduce the amount that a home buyer can borrow without 20 percent down. Buyers will now be required to put more money down, which may keep some buyers out of the market temporarily. In the short term, fewer buyers means fewer sales. Currently, the months of single family home inventory is around 5.5 months supply. This number supports moderately stable pricing. If the changes in loan limits cause slower than expected winter sales and the number of for-sale homes increase, average prices in Carlsbad could be pushed to new lows.
Homeowners considering selling in the next six months should keep an eye on the winter market. The deals that are made in winter will set the tone for the preceding year. Take note of asking price, selling price and competing homes. Today's home buyers search for 3 to 6 months and will also be watching the winter sales. Home buyers of 2012 will want similar deals made during the winter should inventory levels remain constant. Sellers will only be able to ask for more if inventory levels fall under 3 months for a period of time.
Regardless of the numbers, savvy homeowners know that residential real estate is intensely emotional and personal. They understand that to sell quickly in the slower winter months the home has stand out amongst the competition. Taking the time, effort and resources to do minor fix-ups, clean-ups and staging will create the emotion needed to break a home buyer out of their winter malaise. A professional, experienced third party will be able to create a plan that would yield the best results for the money. If you are considering selling a property, consult several experienced real estate professionals and get advice on how to maximize your selling price.
Also, homeowners may benefit from removing their property from the market temporarily and re-listing in the spring. Take the extra time to enjoy the holidays, finish the "honey-do" list and prepare to sell when more buyers are searching for a home.
For information on staging, neighborhood market values and winter real estate questions, Email [email protected]
Great Historical Winter Real Estate Deals
The purchase of the Alaska territory from Russia in 1867 was one of the great real estate deals in American history, and it happened in the winter. Although not without criticism, William Seward negotiated the purchase of 586,000 square miles for $7.2 million, or 2 cents an acre. His purchased turned out to be a 'gold mine' when the great Klondike gold rush began in 1896. Originally a defensive play against Great Britain, the United States was approached by a cash-strapped Russia that feared losing it inevitably, without compensation, in a future conflict.
The winter is a home buyer's best ally. The winter market sees fewer buyers than summer months. With less competition, buyers are able to offer more aggressively without the fear of multiple offers and a biding war. Recent sales during October are showing that home buyers are securing as much as 5 percent off the listed asking price. A significant difference from the 2-3 percent discount from April to June this year.
In Carlsbad, average market time has increased to more than 80 days with average sale prices about 5 percent less than the summer months during this year. During a 30-day winter period, 74 homes went under contract, compared with roughly 100 during a similar 30-day period in the summer. This follows the historical trend of a decrease of roughly 30 percent in sales during the winter months.
And this winter market may see continued slowing as the extended conforming loan balance amounts have moved down to $546,250 from $697,500 as of Oct. 1. The expiration of the higher loan limits, set by the Federal Housing Administration, will reduce the amount that a home buyer can borrow without 20 percent down. Buyers will now be required to put more money down, which may keep some buyers out of the market temporarily. In the short term, fewer buyers means fewer sales. Currently, the months of single family home inventory is around 5.5 months supply. This number supports moderately stable pricing. If the changes in loan limits cause slower than expected winter sales and the number of for-sale homes increase, average prices in Carlsbad could be pushed to new lows.
Homeowners considering selling in the next six months should keep an eye on the winter market. The deals that are made in winter will set the tone for the preceding year. Take note of asking price, selling price and competing homes. Today's home buyers search for 3 to 6 months and will also be watching the winter sales. Home buyers of 2012 will want similar deals made during the winter should inventory levels remain constant. Sellers will only be able to ask for more if inventory levels fall under 3 months for a period of time.
Regardless of the numbers, savvy homeowners know that residential real estate is intensely emotional and personal. They understand that to sell quickly in the slower winter months the home has stand out amongst the competition. Taking the time, effort and resources to do minor fix-ups, clean-ups and staging will create the emotion needed to break a home buyer out of their winter malaise. A professional, experienced third party will be able to create a plan that would yield the best results for the money. If you are considering selling a property, consult several experienced real estate professionals and get advice on how to maximize your selling price.
Also, homeowners may benefit from removing their property from the market temporarily and re-listing in the spring. Take the extra time to enjoy the holidays, finish the "honey-do" list and prepare to sell when more buyers are searching for a home.
For information on staging, neighborhood market values and winter real estate questions, Email [email protected]
Great Historical Winter Real Estate Deals
The purchase of the Alaska territory from Russia in 1867 was one of the great real estate deals in American history, and it happened in the winter. Although not without criticism, William Seward negotiated the purchase of 586,000 square miles for $7.2 million, or 2 cents an acre. His purchased turned out to be a 'gold mine' when the great Klondike gold rush began in 1896. Originally a defensive play against Great Britain, the United States was approached by a cash-strapped Russia that feared losing it inevitably, without compensation, in a future conflict.