Fall Home Buyers Are Out There
Fall is not usually seen as the hot season for buying and selling homes. Spring holds that honor. But, in fact, certain types of buyers are afield in the fall, and this fall could be busier than many.
Spring is the premier season for real estate sales because it leaves time for families to relocate in the summer, before school starts. And, of course, many homes look their best amid green leaves and flowers. Summer’s too hot for trudging from home to home, and winter days too short and cold.
But many homes do look wonderful surrounded by fall colors. Moreover, single people and couples without children don’t worry about school schedules, says HSH.com, the housing data firm. Average home prices are typically lower in the fall than in the spring, because buyers without children buy smaller homes, HSH says. (Fall is the bigger selling season in Florida and Arizona, pushed by “snowbirds,” mostly retirees trying to beat winter.)
New jobs or transfers force some people to move in the fall even if it’s not their first choice. And HSH says many people who must move, or want to, feel a rush to resettle by the holidays. Others want to lock in the tax benefits of homeownership before year-end – getting a few months of mortgage interest deductions, for instance.
HSH cites a survey by ERA Real Estate showing the breakdown of fall buyers:
- 27% first-timers
- 20% people trading up
- 17% downsizers, mainly retirees
- 14% investors
- 11% military relocations
- 6% vacation homes
- 5% other categories
So the seller who missed the spring shouldn’t give up and wait until next year, especially if the home is suited to singles or people without kids.
And this fall there’s another factor. Many experts are now firmly convinced that the housing market has started to rebound. Sales and price are up, and home-builder stocks are rising, reflecting a great deal of optimism.
What will it take to keep that optimism going?
Low interest rates help by making loans cheaper, and the Federal Reserve has promised low rates for the next couple of years.
Unemployment has not improved very much, but isn’t getting worse, either. If fewer people feel their jobs are at risk, they may be more willing to take on mortgages.
Rising prices will also be encouraging to the millions of homeowners who are underwater, owing more than their homes are worth. If they think they’ll eventually get above water, they’ll be less inclined to walk away from their homes. That will shrink the “shadow supply” of homes that could go onto the market through foreclosure or short sales. Reducing this supply will improve the supply-demand equation, helping to spur price gains.
Finally, as prices rise, even if only slowly, potential buyers will get off the fence before prices go up further. After years of slow sales, there may be pent-up demand – buyers eager for a reason to plunge into the market.
Once they do, that higher demand may push prices up some more, causing more buyers to start shopping.
All these factors are much more positive this fall than they were last spring, and that could trigger a rise in sales.
Does that mean you should rush to buy even if you’re not ready?
Probably not. The supply of homes remains huge, mortgage rates will most likely stay very low and even the most optimistic experts don’t expect home prices to rise by more than 1 or 2% a year for the next few years. The good deals will still be there next spring.
At 535,000 units, single-family housing production hit its fastest seasonally adjusted annual pace in more than two years this August. Meanwhile, multifamily housing production declined 4.9 percent to a seasonally adjusted annual rate of 215,000 units.
