If real estate agents earned a dollar every time they heard someone say, “I’m waiting until the new year to buy a house,” they wouldn’t retire rich, but it might be enough to fill up their gas tank…with premium!
They start hearing buyers say this just before the holidays, often from buyers who’ve spent months searching for their dream home. And the reasoning seems sound—December is hectic, inventory shrinks, and many hope for better options or lower rates in the new year.
However, there aren’t always drastic or noticeable changes to the real estate market the minute the confetti is cleaned up in Times Square on January 1st, which often leads to many home buyers following a similar pattern in the new year.
The Predictable Pattern of “New Year” Buyers
Here’s a prediction: many buyers who postponed their home search until the new year will follow a strikingly familiar arc to this in the coming months.
- They’ll begin the year excited and optimistic about buying a house in the coming year.
- In the first couple of months they’ll feel like the market hasn’t changed enough yet because rates haven’t dropped significantly or inventory hasn’t ballooned.
- They’ll feel like there’s plenty of time in a year and decide to wait until the spring market officially begins to get serious about looking for a house.
- Spring arrives, bringing more listings…but also more competition.
- They struggle to stand out in bidding wars, losing out to better-prepared buyers.
- They’ll decide to pause their house-hunting efforts for a little while and wait until competition dies down, or more houses hit the market.
- Summer will come and they’ll blame vacations for a lack of inventory, or their reason for not being able to look at houses.
- The holidays return, and they’re back to saying, “We’ll wait until next year.”
Sound familiar? If so, don’t feel bad, it’s a cycle agents witness many buyers go through each year. But the beginning of 2025 might hold a subtle, game-changing opportunity to help you avoid repeating it, while other buyers fail to recognize the opportunity at hand!
What Most Buyers Will Do (and Why You Shouldn’t)
According to recent Redfin data, the number of homes for sale has hit a four-year high, rising 12.1% year-over-year. Even more notable, over half (54.5%) of active listings have been on the market for at least 60 days without going under contract.
Many of these “stale” listings are sitting on the market because they were simply overpriced, which is a golden opportunity for buyers who get out there as soon as the new year begins and start making offers.
Properties that aren’t perfectly priced or move-in ready linger almost always linger on the market. But the fact that many buyers took some time off for the holidays adds to why there are more homes on the market and they’re taking longer to sell. And a house often loses even more appeal to buyers as it racks up more and more “days on market”. So a lot of the houses that are sitting on the market will easily be ignored by other buyers.
Many buyers will wait for new listings to come on the market in spring, or pounce on any new listings that come on before then if they’re priced right and/or in great condition. But they’ll just end up facing stiff competition from other buyers for those listings.
This makes the next month or two prime time to scoop up a house with less competition and possibly for a better price.
Instead of competing with a crowd, savvy buyers can take advantage of the quieter winter months to go after the homes that others are ignoring. It’s also the perfect time to consider homes that have been sitting on the market because the sellers are often more willing to accept offers below asking price or agree to favorable terms.
Your January 2025 Home-Buying Game Plan
Here’s how to make the most of these market conditions:
- Ask your agent to search for homes that have been on the market for 60+ days, or whatever they feel constitutes “stale” in your market area.
- Also ask if they can look for any properties that may be off-market currently, due to the holidays. Some sellers pull their listings in winter, intending to relist in spring. Have your agent reach out to the listing agents of home sellers that may have taken their homes off the market to see if they are still open to offers.
- Be patient and don’t get discouraged. Even if you aren’t able to get a house under contract in the first few weeks of the year, stay focused and continue to remain active in the market. This will help you compete against other buyers who enter the market in the months to come.
The Takeaway:
When the holiday season rolls around, many buyers often put off looking for a home until after the new year. However, they often end up pushing that start date off until the spring market begins.
But you may want to start your search in January or February in order to avoid the competition that will surely increase in the spring market, as well as take advantage of the fact that there are currently more homes sitting on the market unsold than there have been in the past four years!
