You probably have heard that the Holiday Season is a good time to look for a house, as most people would be more worried about family dinners, holiday parties, and shopping for presents than looking for a new house. With fewer buyers on the market, the sellers would be willing to accept lower offers. Intuitively this makes sense. But, is it supported by the sales data?
Seeking factual support for the above hypothesis, I analyzed the sales data for single family homes in San Mateo County for a six year period from 2005 through 2010 (raw data source: MLS through San Mateo County Association of Realtors®). The results of the analysis are summarized in the following three charts:
Monthly home sales as percentages of annual sales are the lowest during the months of November through February. This supports the claim that there are less buyers in the market between September and January (allowing 30-45 days from offer acceptance to closing the sale).
Number of days it takes from listing to closing starts increasing in August and it is the highest in January. In other words, it takes about twice as long to sell a house during the Holiday Season as in the summer months.
Buyers who begin looking for a house early in the year do not have much bargaining power, as they pay almost the full asking price. Those who don't mind shopping for a house during the Holiday Season are rewarded with an almost 2.5% discount, on the average, from the asking price.
The charts are self explanatory and the data points represent averages of the numbers for the six years, 2005 through 2010. “Sale” refers to the closing of escrow, which occurs 30-45 days after an offer is accepted and a sale contract is signed.
In summary, the sales data for San Mateo County support the claim that the “Holiday Season” is the best time for buyers to look for a home. The buyers who are willing to go house-hunting instead of holiday shopping will be rewarded by the home sellers who are willing to accept offers that are 2.5% lower on the average than they would have accepted during the peak sales period.
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