Home truths: Festive season to buy and sell?
IT'S the season to be jolly- to spend cash you don't have, to dance on tables at office parties, to eat too much and meet up with all the "friends" you haven't seen since last Christmas.
Certainly it's not a time to buy and sell houses. Or is it?
Traditionally there are two property trading seasons each year. Activity begins in earnest after St Patrick's Day, peaks in May and then peters off before coming to a complete halt in mid July through most of August. The second season tends to kick off around the last week of August, builds up to a peak in late September and October before winding down through November. Finally it comes to a halt in December.
The logic seems obvious - people go on their holidays in the summer, by Christmas they're only interested in talking turkey.
But the experiences of estate agents show that a contra trend approach can benefit both buyers and vendors through the winter wind down in particular - if they time it properly.
Buyers who get in just before Christmas can make a killing because those vendors who haven't sold their homes by now are getting increasingly desperate.
By Christmas estate agents are generally left with a book full of homes that are over ambitiously priced - otherwise they would have sold by now. Vendors who have ignored their selling agent's advice through the Autumn season on price begin to wake up and smell the coffee as November winds on. Those vendors are also usually planning to trade up or down and when it becomes apparent that they won't be moving for Christmas, they'll at least want to have a home lined up for the new year instead.
So as we move through November the flow of properties to market peters off, along with the numbers viewing. The prices of some remaining properties start to get cut and some desperate vendors will now over compensate. Fed up with people traipsing through their homes each weekend, they'll decide to "just get the thing sold - whatever it takes." And this is where the wily unseasonal buyer makes a Christmas killing.
There is good reason for getting a house sold before Christmas. A property that carries over New Year from one season to the next can become "stale" in the eyes of home hunters. Potential buyers who have not found a suitable property before Christmas will recognise a "lingerer" in the New Year and it will have an overfamiliar flavour to it. They may implicitly form a view (however misjudged) that there must be something wrong with a property that has gone all the way through the Autumn season to Christmas and reappeared the following year without achieving a sale. They will by nature be looking out for "new" propositions.
So if you're a buyer, it's definitely December for desperate vendors and the chance of a bumper value package.
In contrast, it could also be strongly argued that January is in fact the best month in the year to launch your house for sale - that those who launch in January actually get better prices than those who do so with the rest of the posse at Easter.
This is because once Christmas is over, serious home hunters tend to hit the ground running straight away and steeled with a stiff New Year's resolution resolve. "Now Christmas is out of the way, it's time to buy that house. Let's do it!"
But those who plan to sell their homes are only getting over Christmas. The decorations have to be taken down, the property needs a clean up and they'll go with the received view that a house doesn't show well in darkest winter. They'll want to have the first season's blooms in the garden, they'll want to rake the leaves and cut the grass and they'll want to have a painter through to brighten things up before the estate agent's sign goes up.
Yes, your house might look better in March or April, but so too do the other 20 abodes round your way that will joining the market at exactly the same time as yours.
January's vendor comes to market with minor competition to a hardcore group of potential buyers trying to choose from a limited amount of property. The law of supply and demand kicks in.
"Early season home hunters are a serious lot - those looking in January and February just want to get out and buy," says DNG's Brian Dempsey. "For that reason vendors who have their homes on the market at this time have an obvious advantage with so much less choice on offer.
"There might be just five buyers through a house in January instead of 20 in April, but all five of those January viewers will be keen to do a deal. As a result you do see homes fetching that bit more early on in the year."
Ask any estate agent and they'll tell you the same. But few punters will take advantage of the seasonal market shifts this year or next year, simply because the herd mentality usually prevails with property - why a few always make money at the expense of the crowd when it comes to buying and selling.
Mulled wine anyone?