Yes Virginia..oops, I mean you, there is a Santa Claus.
Look, full disclosure, I’m not 100% sure there is a Santa Claus, but I’m also not 100% sure there is NOT a Santa Claus. Call me overly cautious, but I figure that leaving out some milk and cookies is a decent investment in maybe getting some sweet presents on Christmas morning.
It used to work all the time when I was younger, but since I moved away from home to go to university, it hasn’t worked nearly as well. I guess Santa doesn’t value higher education?
I can tell you that in real estate, buyers can get a very nice present at Christmas time.
It’s because real estate deals are done between people.
That’s not the most astute observation I’ve ever made, but I think it is something that is often overlooked when we talk about real estate markets as if they are independent of the people in the market.
I’m not suggesting buyers get a better deal at Christmas because of the spirit of the holidays.
It isn’t because sellers become filled with the Christmas spirit and decide to gift buyers with a property at a reduced price.
It isn’t because listing agents decide to go gentle on purchasing agents and not negotiate as hard on the sale price.
Buyers have a real opportunity over the holidays for three reasons. Three very practical reasons.
- Lots of people have lots of obligations.
Regardless of your religious beliefs, the holidays are a very busy time for most people. Lots of workplaces close down for longer than the statutory holidays and that means the same work has to be done in less time in December.
Add in holiday work parties, personal get togethers and shopping and most people have less time in December than they do in other months.
- For Buyers, this means less time to get out and see properties, less time to review mortgage options and get pre-approved, less time to focus on buying.
- For Sellers, this means less time to leave the house when appointments are booked, less time to keep the house in its best shape and less time to focus on selling.
- For Realtors, this means less time to market and prospect your listings, less time to find, book and show places to your buyers and less time where clients are available.
With so many other demands on their time, December becomes the season for fitting in real estate when you can. Even if you remain dedicated to buying or selling or working with clients, everything slows down because other people involved in the market focus on other things.
- It’s harder to do things in the cold.
I know this seems like a small factor. After all, we’re Canadians! We deal with the cold all the time.
That may be true, but I also believe it is true that a cold or snowy day makes doing everything just a little bit harder. Time outside is a little more unpleasant and boots, gloves and hats make going in and out of properties take longer.
I’ve had more cancellations of showings in the winter months than in the rest of the year by about a two to one ratio. Sellers have to leave their cozy home to let buyers see it and after a long day where everything took longer than anticipated, more showings get cancelled as sellers (and buyers) say “Not today. I can’t handle it today.”
Whether it is the buyer, seller or the agent, everyone are still just human. I’ve spent many a frigid time outside trying to open a frozen lockbox, finding a parking space from the more limited number available due to snow, and other joyous winter games. The extra effort required makes all parties involved less positive about the experience and I’ve seen many a potentially good options turn into a firm “no” because it’s been a hell of a day.
- Sellers (and some seller’s agents) get pretty damn worried.
The final reason that buyers can have a real opportunity to buy at a great price during the holidays and beyond is because it isn’t just December that faces the above issues.
Sellers on the market in early December know that the month is a busy one. If they haven’t already seen a drop off in the number of showings of their home, they will as the weeks pass and people get busier.
January is the slowest month in terms of number of sales. It was in 2014, 2015, 2016 and 2017 – and it will most likely be the slowest month in 2018. The below chart shows the number of sales going back three years on a monthly basis. The red stars indicate the lowest point of the year and the green stars indicate the highest point of the year. If I put in yellow stars for the 2nd slowest month, it would be December.
It’s not surprising that we see the green stars showing up as the weather gets warmer and we head into spring. Lots of Canadians put off real estate until they have more time and energy to devote to it.
Not only do we see fewer sales in December and January, we also see that the lowest average sale price tends to come in this time period.
The below chart is the monthly average resale home price over the last three years. Again, red stars indicate the lowest point of the year and green states indicate the highest point of the year.
We see that for 2014, 2015 and 2016, the lowest average sale price was in January. 2017 was an unusual year in many ways as the spring market started in January rather than April. Our lowest average sale price in 2017 has actually been August.
Despite this unusual activity in 2017, as we head into December and then into 2018, I am certain that we will see a return to the normal pattern of lower average prices starting in December and extending into the dead of winter (January and February). The pending mortgage qualification rules that come into play January 1, 2018 will certainly slow down January sales and we will see a corresponding drop in average sale price as fewer buyers are courted by anxious sellers.
When sellers (and their agents) get worried, some give in to their worries and sell at a lower price than they need to for some peace of mind.
If you or someone you like is interested in buying a property, then Christmas and beyond is likely going to be a very good buying opportunity. If selling is in the cards, then you need an agent who understands what takes place in the coming months and keeps you confident that the right buyer and right price can be found. In either case, if you need some real estate help, please get in touch – I’d love to be responsible for what comes next.
The greens and greys of hospitals and office corridors are depressing and cold. Natural wood, sunlight, bright colours are warm.
We have colour trends that come and go in real estate and currently light grey is very much a go to colour for designers, stagers and other design professionals. I have seen some very sharp looking properties done over in this paint colour and it really brightens and improves the feel of the home.
I have also seen such colours used in places where there is no wood or not much sunlight and the home felt cold and sterile. When considering paint colours, make sure to take into account the specifics of the rest of the room or home. Where there is no warmth from other sources, consider bright colours like red and yellow and orange and brown.