Every year as we approach the holidays, activity plummets while opportunities rise. Here’s why that happens – and how a savvy buyer can take advantage of it.
It’s December, time to stop listing homes.
One of the most consistent trends in real estate is the drop in the number of new listings in December compared to in November.
How consistent? When we look at the last 10 years, December saw an average decrease in new listings of 53% compared to November.
Fifty. Three. Percent. That’s a big drop.
Last year in the GTA, we went from 10,538 new listings in November 2018 to 4,309 new listings in December 2018. That’s a 59% decrease in the number of new listings.
To put it another way, 6,229 fewer people decided to list in December than November. That’s more than 6,200 less homes that came on the market.
Without question, this December will be a similar story.
Oh, I guess it’s also time to stop buying homes.
The common wisdom is that it doesn’t make sense to list right before the holidays. Buyers and Realtors are starting to focus more on finishing up work rather than starting new projects. Come December 15th, shopping, preparing for family visiting and time off work means that going house hunting isn’t top priority.
Does that logic hold up to a review of the numbers? Yes, it does.
Over the past ten years, the GTA sales in December dropped by about 34% compared to November sales. Last year, we went from 6,206 sales in November 2018 to 3,747 sales in December 2018. That’s a 40% decrease in the number of actual transactions.
That makes sense given the drop in the number of new listings. If listings go down by 53% on average in December, then a drop in sales of about 34% is reasonable. Fewer new properties, fewer sales.
If you do want to sell, better be patient and prepared to take less.
The final numbers worth examining is the average days on market and average sale price in December.
When we look at the last 10 years, sellers were on the market for about 3.5 days longer in December than in November. That’s about a 13% longer time on the market, meaning if you did sell in December, you’d been on the market significantly longer.
The average sale price drops in December compared to November as well. Buyers who bought in December paid about 3.5% less than buyers who bought in November, indicating that December is indeed the right time to find a bargain. On average, buyers who waited until December saved about $22,000 compared to those who bought in November. Not too shabby!
How can buyers use this knowledge to their benefit?
For buyers who are in the market as we approach the holidays, there are a few things that they can do to take advantage of this information.
- Understand that buyers who list in mid-December are either desperate to sell or have a Realtor who doesn’t understand the timing is not the best. In either case, go into negotiations with a more aggressive approach than might work during other times of the year.
- Work with a Realtor to help you buy who scans the market for opportunity. Properties that have been on the market for a length of time come December 15th can be good targets for more aggressive offers.
- Make sure you don’t take the holidays off along with everyone else! If you and your Realtor take the time to see places while others are taking a break, it can result in buying a place at a significant discount and starting your 2020 off with a bang!