In many parts of the United States, homebuying over the holiday season slows down to a glacial pace. Let’s face it — only really motivated buyers would put on heavy coats and boots and trudge through the snow to find their dream home.
Here in sunny Southern California, we face no such weather challenges, but the real estate market still experiences a significant seasonal slowdown. Some of the buyers who’ve been looking for a while begin to say, “We’ve decided to put our plans on hold for a while – probably until sometime after the new year.” I started getting those calls and emails right before Thanksgiving.
This seasonal slowdown translates into a great opportunity for those who are looking now. In Long Beach, Lakewood, Signal Hill and surrounding areas, I’m already seeing some great deals and less competition than we’ve seen for a while.
Here are five good reasons to look for a home now:
1. Lower prices. Many people are busy with shopping, baking, or going to holiday parties this time of year and put their real estate plans on hold. The lower demand often shows up in softer home prices. With prices already relatively low, a seasonal slump may give buyers even more purchasing power. Right now especially, many of the homes on the market are distressed properties — whether short sales or foreclosures.
2. Less competition. With fewer active house-hunters out there, you are less likely to end up in a bidding war that would drive up the price for the house you want or put it out of your financial reach. Properties that are priced in such a way they would have been snapped up in September or October may just sit on the market in December.
3. Motivated sellers. Homeowners who didn’t get their properties sold before the holidays may be very motivated now, especially if their houses have been on the market for a while. With less competition and more motivated sellers, buyers have more negotiating power, meaning in addition to lower prices, buyers may be able to negotiate extras like appliances or flexibility on closing date.
4. Favorable mortgage terms. Fewer home sales translate into less demand for mortgage money during the holiday season. Lenders may be willing to shave a few basis points off the interest rate they offer you or to forgo some of their fees in order to get your business. And interest rates are very low right now!
5. Tax deduction. If you hurry, you may be able to close escrow on or before December 31, meaning you could be eligible to deduct the interest component of your first monthly mortgage payment from your taxable income for that year. You may also be able to deduct any money you pay for points to reduce the interest rate on your loan. (Consult a tax advisor to see how the mortgage interest deduction applies in your situation.)
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