So, you have been thinking about selling your home during the winter, but winter in Wisconsin is kind of long.
On top of that, there’s the holidays with Thanksgiving and Christmas that gets everybody distracted.
You remembered that traditional wisdom is telling you not sell your house during the winter and wait until spring…at least that is what uncle Mike said. So what is it really like to sell a house during the winter? Is it really a bad idea? Let’s take a look at some data.
When it comes to selling a house in the middle of the winter, let’s talk about the seller’s perspective first. It is a very common misconception that buyers are planning to move around the school year. This is true in some cases, but when you look at the data, you can see that more than half of all buyers don’t even have kids in the school age. So it’s a completely non-issue for them.
For the other half, many of them are relocating locally and the kids can even stay in the same school district or just have a short commute for the remaining months of the year. So it is true for some buyers, but for the vast majority of buyers, school year is not really that big of a factor.
Another major concern that sellers have is that the house will obviously not show as nicely during the winter months as it would in spring and summer when everything is green and in full blossom. This is when pride of ownership comes through, and of course, every seller wants their house to look the very best when they’re putting it on the market and presenting it to buyers.
But, keep in mind that buyers are comparing one house during the winter versus another house in the winter. They’re not comparing your house during the winter with your house during spring or another house during spring. Buyers are fully aware that the landscaping will look much nicer during spring, and it is usually not even the talking point for them.
So here’s the interesting part. When you look at the data, you can see that sales in Wisconsin during the winter month are down about 23%, which is actually not that bad, but it becomes a self fulfilling prophecy. Because sellers are thinking that winter is a bad time to put the home on the market and they’d rather wait for spring, every year in fall, we’re seeing a decreasing number of new listings hit the marketplace. From a buyer point of view, that means when they’re looking at the inventory, there are fewer choices and most of it is leftover inventory from last summer, which is either overpriced or just in poor condition and not attractive.
So in a way, the lack of attractive inventory, in many cases, is also contributing to the 23% reduction in sales that we’re seeing during the winter month. But there is another issue that makes matters even worse, or should I say inventory even lower?
Inventory is already in slow decline over the fall months. Whatever inventory is left, oftentimes has a listing contract that is set to expire by December 31st. So by the end of December, a lot of the remaining inventory is going to disappear as well.
Of course, the sellers that have not been able to successfully sell their home now feel confirmed in the notion that winter is a bad time to sell a home, and they’re usually going to take a break and not going to relist until later in spring. So from an inventory point of view, the inventory is already low by December and it’s taking another sharp hit by the end of December. If you look on the internet on January 1st, there’s barely anything left. Keep the thought in mind because I’m going to get back to that in just a minute.
So this was the seller’s perspective. Now, let’s take a look at buyer behavior. Throughout fall, buyers and sellers are somewhat on the same page. There is no major disconnect there. We’re entering the holiday season beginning with Thanksgiving. On both sides, we are seeing activity levels slowly decline. Everybody’s busy and distracted with the holidays. The major disconnect is happening on January 1st. Remember how I was explaining before how inventory is taking a sharp decline by the end of December? Now, the irony is that buyer activity is jumping up on January 1st significantly.
The reason I believe why this is happening is because the holidays are always sparking discussions around homes. Thanksgiving, you find out that your dining room table is not big enough and at Christmas, there are conversations about a new home, but everybody is putting it off until the next year. So then you have New Year’s Eve and everybody’s waking up on January 1st. They find out it’s the new year. So everybody and their brother gets on the computer, looking on the internet for inventory and you guessed it, there is almost nothing there. So this is the big gap that’s opening up. That’s the big cultural misunderstanding between buyers and sellers who are totally not on the same page.
It’s almost ironic, every year in January and February, I have conversations with my buyers that say, “There’s no inventory. There’s nothing on the market. We really need to buy a house now and we can’t find anything.” Two hours later, I have a conversation with a potential seller and they’re telling me, “It’s not a good time right now. We’d rather wait until spring.” So that gap is slowly closing as we’re progressing through January and February and then into March. There’s more and more inventory available, which means from a buyer’s perspective, there’s going to be more choices. From a seller’s perspective, that means there’s going to be more competition.
I guess this is really one of the things where the internet has profoundly changed the way how we’re doing things in our lives. It’s very conceivable to that before the internet, it was indeed a little bit more difficult to sell a house during the middle of the winter. Even 10 years ago when you were looking online and all you could see was maybe a dozen, low resolution pictures, you still had to go out and physically look at the property, but today, every good listing has at least 50 high definition pictures, so it’s very easy to shop for listings from the convenience of your living room. So internet has changed how we’re doing things, not only we’re shopping on Amazon, but also the way how we are shopping for houses.
In summary, if you’re considering selling your home and you have an open-ended timeline and nothing is rushing you, you can certainly wait until spring and list your home during traditional home selling months. But on the other hand, there is nothing wrong with listing your home during the winter. In fact, there’s some key advantages to it.
First of all, inventory is usually a lot lower and less inventory means less competition for you as a seller. In fact, the inventory that is out there is typically very picked over, so you get a lot of attention as a new and attractive listing from the buyers. Secondly, the buyers that are out there and shopping for homes in the middle of the winter are usually very determined and they’re shopping for your house for a reason. This is also reflected in their home buying strategy and how they’re making offers. So this offers a key advantage for selling a home in the middle of the winter.
Thirdly, it may also be beneficial for you from a timing point of view. So if you want to sell first and then buy later, you can time it in a way that you get an accepted offer on your home and as inventory levels are increasing in the marketplace, you’re ready to become a buyer on your own.
Thank you very much for reading and/or watching. I hope you got some interesting information out of it!