If you’re a first time homebuyer in Minnesota, you may be wondering, “When would be the ideal time to purchase my first home?” Well the actual answer is: whenever you’re financially ready. But to those of you who want some insights into the seasonality of our Real Estate cycle in the Northstar state, here are some facts and numbers to consider before starting the home-buying process for yourself.
Weather
Let’s face it–most people don’t want to move when it’s cold, snowy, and downright just miserable outside. This means that a lot of fellow homebuyers aren’t looking for properties in the winter months of December, January, and February. You may think that this means it could be a buying opportunity for you, since the lack of competition in the colder months is favorable to home-buyers. However the weather affects both buyers and sellers alike. Which means that there are few options to choose from in the colder months of the year.
Once Spring hits (usually in March/April, but hey–this is MN we’re talking about!) we typically see a flurry of Housing Market activity in the form of many new listings, and lots of homebuyers getting approved for mortgages, showing houses, and making offers on properties. Springtime weather is a great time to buy, however there is a good amount of competition, because people want to get out of the house after a long winter season.
Holidays
Weather isn’t the only factor that impacts our housing market. Various Holidays throughout the year also play a large part on how many people are buying and selling respectively. Obviously the wintertime Holidays of Thanksgiving, Christmas, Hanukkah, New Year’s and Kwanza signal to people that it’s time to take vacations and focus on family rather than get ready to move or list their home for sale. So naturally there is not a lot of movement in the market during these months. However, other Holidays such as Memorial Day, independence Day, and Labor Day also spark people to get going on their home buying and selling plans.
If folks have school-aged kids, they may mark some of these Holidays as benchmarks on when to close on their new (or old) homes, and thus, these Summer-time Holidays are indicators for some buyers on when to have a house under contract by. This way, they will be settled and ready to enroll their kids in school by the time September rolls around.
Overpricing Window
In most years, we see the highest number of homes sitting on the Market in the late summer and early fall time frames. There are a few different reasons for this, and if you want to know when the “best” time of year to buy your first is, I’d usually point to August through October.
First off, many home sellers see what their neighbors and other competitors received for a price in April, May or June, and think to themselves “I can get a little more for my house!” So they make the mistake of over-pricing their home when the list it for sale in July, August or beyond. This causes the house to sit for a longer period of time on the Market, and eventually reduces price down to a more realistic level.
Secondly, as we discussed above, many homebuyers want to be in their new place by the time school starts in September. Thus, the amount of buyers declines in the late summer, because most people what wanted to move in the current calendar year already did so by the time August and September roll around.
Thirdly, since prices typically go up in the Spring and early Summer months (due to high buyer demand), the buyers that are “leftover” or begin their home searches in the Summer and Fall months aren’t too keen on paying higher and higher prices for no good reason. So they tend to be a little pickier when it comes to the home’s condition, and aren’t so eager to pay top dollar as they see homes ask for higher prices than just a few months ago.
All these factors contribute to the late summer and early fall being the best time of year to buy a home in Minnesota. However, it doesn’t mean that this is the only time of year you should be shopping. In fact, it’s no guarantee that the type of home you want will be available in the later summer months. That’s why the real answer is that you should begin the home-buying process whenever you are actually ready.
If you want to get the process started off RIGHT, come to our free monthly first time homebuyer Class in Bloomington. We walk you through the process step by step and make sure you don’t get caught off guard by any surprises along the way. We also stay as long as needed to answer all your individual questions, and follow up to make sure you feel confident in your home-buying journey.
Hope to see you soon! Register here: