March 17, 2020
Categories: Tools
Is there a best time to purchase a new home? You’ve probably heard the spring season is the peak homebuying season, and numbers seem to prove that. However, if you are not compelled to purchase in the spring would you be better off purchasing a home during another season of the year?
While Realtor Holly Hamilton’s advice, “In Charleston it seems the best time to buy a home is when you find the one you love and have the financing to snag it”, is spot on, there may well be factors affecting when you choose to purchase your Charleston home.
What factors may affect when to purchase a home?
A major life event usually triggers the purchase of a home for most people such as getting married, getting a divorce, family size increase, the death of a spouse, retirement or when they’ve downsized or upsized for a job change. These major life events are seasonless. Life happens and people adjust to their needs.
Most parents try to minimize life disruption for their children when moving from one home to another. If they can, families prefer to align their new home purchases to the school year, selling and buying in time to complete the year in the “old” house and start summer in the “new” home. This allows their children to complete school in their current one and begin the fall term in their new one.
Do the seasons themselves affect people’s choice of when to shop for a home in the Charleston area? In northern climates, people don’t usually shop for homes in the winter. Since we don’t have ice and snow, typical wintry weather is not a factor here when it comes to getting out in January. Conversely, summer is hot here in the Lowcountry. It can be oppressive and may limit some people’s desire to shop for homes then. This translates to lower competition for available homes in the summer months.
How housing demand affects average days on market for homes in the Charleston area?
Charleston’s real estate market is active. The Charleston Trident Association of Realtors’ (CTAR) report from January 2020 demonstrates this, “New Listings were down .1 percent... Pending Sales increased 30.9...Inventory shrank 18.7 percent.” Typically, spring shows an upswing new listings. According to CTAR, “We start off the year with continued low interest rates, low unemployment, and rising rents nationally. These factors should encourage healthy buyer demand and sets us up for a strong start to the 2020 housing market and a lot of optimism for the coming spring market.”
Buyer demand can be interpreted by looking at average days on market as a signifier of demand pace. Charleston Realtor Holly Hamilton who is with Daniel Ravenel Sotheby’s International Real Estate, provided statistics from the Charleston MLS to illustrate how buyer demand for new construction homes has increased since the beginning of the year.
The market for new construction in 2019 was hot with the Charleston Trident Association of Realtors reporting, “new construction supply has dropped from 5.0 to 3.3 months.” This means that there was (in all of 2019) an average of 3.3 months’ supply of new construction homes available for buyers. CTAR notes, “New construction activity continues to improve, but is still below levels required to fully supply the market’s needs. In January 2020, days on market for new construction homes in the tri-county area were 57 days with homes in Berkeley County having the shortest time on market at 44 days, followed by Dorchester County with 51 days and Charleston Country with 66 days.
In January 2020, the average days on market for all residential property for the area was 54, with Charleston County having 91 days on market until sale for residential property and Dorchester County properties having only 55 average days on market and Berkeley County having 45 days on market. If you are trying to purchase a home in the Charleston market, you are wise to keep these stats in mind.
In the case of resale homes, buyers ought to expect rising prices. CTAR notes in their January 2020 Market Report, “The overall Median Sales Price was up 4.3 percent as compared to January 2019, to $279,000.” If you’re looking for a home in the $150,001 to $200,000 range you’d better act quickly when you ID the home of your choice, as these homes go under contract on an average of 34 days.
“In spring, there is generally a better selection for buyers but also lots of competition” said Dunes Properties Realtor Kristin Walker. Buyers will “pay closer to list price or in hot neighborhoods - and have to deal with bidding wars.” She continues, “in the late fall, there are fewer houses to buy but, as you get closer to the holidays, a buyer is more likely to get a discount on the asking price if the house has been sitting on the market.” Walker acknowledges that the varying geographic areas of Charleston’s market can have varying pressures on seasonality, “Best times are very different for primary home areas compared to second and vacation home areas.”
Jason Ogden, with The Cassina Group, told us, “On the beach islands, if you're looking for a deal, the fall/winter is generally the best time.” Ogden confirms what Walker said regarding second and vacation home areas. The fall or winter he says is the best time to purchase a home which has been used primarily as a vacation rental. Ogden explained, “because the rental income slows down, and the owners tend to get a little antsy. You may get a better deal in the fall, but some of the better properties [which came on market earlier in the year] probably are sold already.”
Time factor for new construction homes
If you’re purchasing a to-be-built home from a production builder, there are other factors to be considered. We discussed many of these in a previous blog post “Is there a better time of the year to buy a new construction home?” Taking all the factors in our previous blog post into account, there are still other aspects to be considered, such as time to completion.
Pulte Group’s VP of Sales and Marketing for the Coastal Carolinas Jaymie Dimbath tells us, “Some buyers want to get into their new home before the school year. Some want to make sure that they are home for the holidays. Some are starting a job and want to time their transition around that. Everyone’s timing is truly personal to them. Because it takes 5-7 months to build a home, discussing your timing needs with your New Home Sales Consultant is very important in ensuring that we can help you accomplish your goal of a brand-new home!”
Can’t wait 5-7 months? Lowcountry builders frequently have inventory homes ready for sale, and those are perfect for people who must purchase a home because of an immediate need. Though keep in mind, choosing a to-be-constructed home on a lot from the builder’s available ones, allows you to personalize all your fixtures, finishes and fittings.
So, when’s the best time to buy a new home?
The best time to purchase a new home is when you’re ready. And you must be informed of how these affect your ability to find the home you desire. Happy hunting!
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Categories: Tools