In mid-January, Kim Colaprete held an open house for a property that had just hit the market in Seattle. With nearly 100 people attending over two days, it was a busy event, says the broker of Team Diva Real Estate with Coldwell Banker Bain. Earlier in the month, in Chicago, the Matt Laricy Group had a weekend packed with 20 open houses, drawing in large crowds.
© (Getty Images) A winter scene in Chicago
“They were slammed,” says Matt Laricy, managing partner at the Matt Laricy Group, a division of real estate brokerage Americorp. “You couldn’t even walk in these places.”
In cities across the country, many home shoppers are not waiting until April, which often marks the start of the buying season. Instead, they are now commencing their search early in the new year, according to realtor.com. A realtor.com report states that last year the spring home shopping season began in January for 20 of the nation’s 100 largest metro areas. From Seattle to Atlanta and from San Jose to New York, the first month of the year saw the highest number of listing views on the housing platform. In most of these 20 cities, February also registered a surge in online traffic.
“January has become really an early month for the spring buying season,” says George Ratiu, senior economist at realtor.com. “It is a little bit ironic since it is in the middle of winter. For buyers, there’s very little downtime anymore.”
Spurred by low interest rates but constrained by tight inventory, home shoppers’ early start to the buying season offers leverage to sellers willing to market their residences in the winter months.
This January, according to realtor.com data, homes sold in 86 days, or a couple of days faster than a year ago. While winter generally elicits price discounts, this dynamic might be changing as well. According to realtor.com, although slightly over 15% of active listings sustained price cuts in January, their share of the overall market dropped by half a percentage point. The share of listings that saw their prices increase rose by nearly half a percentage point as well.
Still, Vincent Biondillo, co-founder of Norhill Realty in Houston, warns that after the January spike in buyers’ interest, February could usher price drops if homes fail to sell. “There are more positive attitudes going into January because you assume once you break free of the holidays that activity is going to increase,” he says. “For some properties that doesn’t actually happen. Those positive feelings start to diminish in February (and you are more likely to see) price cuts.”
Overall, however, 60% of the agents polled for HomeLight’s 2020 outlook survey of top agents say that homes sell for the same amount – or even more – in winter compared to other seasons.
While the national housing market appears to shift away from the common winter mode of inertia and discounts, sellers should consider local dynamics when deciding whether to list. Two important aspects to think about are:
- Price.
- Preparation.
Here is how winter is swaying these prime facets of the home-selling process in several cities.
Pricing Right Remains Crucial
Aspirational pricing – the practice of setting an asking price above actual value – is losing its popularity as buyers, though pressured by few options on the market, are becoming more educated about costs. Thus, even if winter may outline a seller’s market in some locales, pricing a home right remains crucial.
With little available stock over the last several years, San Jose has seen prices skyrocket. Now, they have “plateaued,” says Sophia Delacotte, real estate agent in the city affiliated with Compass, pushing sellers to rethink their pricing strategies. Along with that, she says more sellers listed their homes this January (rather than in March when the market usually picks up) compared to the same time a year ago.
“Right now, the price you list is usually the exact price you sell for,” Delacotte said. “Do not overprice because your house is going to sit on the market.”
In Denver, Paul Aceto, leader of the Aceto Team at Realty One Group Five Star, says that while January usually stirs momentum, March and April continue to be the optimal months to list. “The fact that the average sold price does tend to be lower during the winter months means that is not the ideal time to list,” Aceto says.
Beyond its relevance for the sale of individual homes, price is a characteristic with broader implications. For instance, in Chicago, condos and townhomes asking under $1 million generate demand in January, while single-family houses are yet to emerge on the market, Laricy says.
“If those (single-family home sellers) would come out in January rather than March or April like they do, I bet all those people would sell,” he says. “I do think there’s an advantage going on earlier because there’s a lot of people who want to get a jump-start and January and February are your best months in the year for that. I would much rather be on a market then than in June or July.”
In Seattle, single-family houses appear to enjoy a similar advantage of limited stock in the cold months. “In the single-family home market, we have seen, this January, quite a few multiple offers,” Colaprete says. “Almost every buyer that we’ve worked with has had to get involved in a multiple-offer (situation).”
While it is an amalgam of many micro-markets, New York City often sees modestly priced properties better withstand the winter cold, says George Case, real estate agent with Warburg Realty.
“If they’re lower priced and smaller units – for instance, a studio or one-bedroom – it’s kind of an ideal time because you have less competition and less units coming onto the market in the wintertime,” Case says.
Case adds that he would usually hold off listing multimillion-dollar properties at least until January, when city dwellers return from vacations and salary bumps greet some of them back. “The Manhattan market responds quite a bit to the financial market,” he says. “We see bonuses being announced and distributed in January and February. So that’s usually a fairly good time to introduce a property to the market.”
In Cold Weather, Preparation Means More
Preening a home for sale is a ritual that assumes new dimensions in winter, especially in cities with inclement weather.
Buyers often begin to form an opinion about a house before they even step foot in it. Hence, the importance of curb appeal. Yet, the latter is hard to maintain in snow and ice.
“Shoveling and keeping a path clear so that buyers don’t have a hurdle with coming to see your home is a big deal,” says Leigh Marcus, a Chicago-based agent with @properties. “That’s still part of your curb appeal in the winter.”
Once inside, Marcus says, a warm home – with temperatures at or above the mid-60s Fahrenheit – welcomes buyers to comfortably look around. For vacant properties, keeping the heat on generates an additional cost for sellers, but in cold locales it pays off, Marcus says. Large-scale winterizing, however, is a measure sellers should carefully weigh. While it may show that the current owners have taken steps to avert cold weather-induced damage to their unoccupied property, it could also discourage buyers.
Moreover, frigid temperatures could complicate, if not render impossible, simple tasks such as painting the walls and cleaning the gutters before listing. Thus, agents often advise sellers to take on this type of chore in the fall. Property photography is another prelisting activity better done in advance.
“That way you also don’t have to worry about rushing to get your Christmas decorations down,” Laricy says.
Whether winter will continue to shape up as an ideal time to list and sell hinges on a slew of national and local factors. A prime one is the supply of new construction, which today is far below demand across the country, says Ratiu of realtor.com. “It’s possible that for the next year or two, the increased level of activity during the winter months will remain,” he says.