If you’re willing to buy when the weather is frightful, your real estate investment deals could be quite delightful. So delightful, in fact, you might save as much as $50,000 or nearly $100,000 in certain locales. According to online real estate management and investment firm HomeUnion, the national square-footage price for single-family rental properties falls by about 7.2 percent during the winter compared to spring and summer levels. However, if you look at this seasonal trend on a city-by-city basis, the numbers get far more exciting.
HomeUnion evaluated cities across the country to identify the “best bets for seasonal bargains for investors,” so they could pinpoint which housing markets offered the best seasonal bargains on purchase prices of single-family rental properties. Greenville, South Carolina offered spreads of $50,000 while Chicago rental buyers could save almost $100,000 if they purchased during winter months. While these deals are certainly exciting, it’s important to note that winter rental rates also tend to be lower in “seasonal cities.” For example, Chicago rents are about $100/month lower for leases initiated during the winter. In cities with smaller temperature shifts, the rental ranges tend to be smaller as well.
This study pretty clearly indicates a lot of sellers are willing to take lower prices on their homes during winter months. But a number of experts are heading into the holiday season with warnings not to act too fast in this regard. Real estate brokerage Redfin recently released numbers indicating winter actually comes in just behind spring in terms of percentage of properties selling above list price. With spring posting 18.7 percent sold over list price and winter posting a close 17.5 percent. During last year’s winter, 46.2 percent of homes sold within 30 days of listing, compared to 48 percent during the spring season. One Redfin professional suggested this might be due to the fact that although there are fewer people looking to buy in winter months, the ones who are, tend to be serious. Also, since spring is conventionally considered to be the best time to list a home, sellers who list in winter may have less competition.
These two studies are not necessarily in conflict since HomeUnion only evaluated single-family rentals for its study and Redfin analyzed all properties that went to market over the course of various seasons. If you have been putting off making an investment because the weather is too frightful, you might want to reconsider. You could end up snagging a really great deal thanks to your ability to brave the cold.
About the Author
Carole VanSickle Ellis serves as vice president of research and analysis at the Self-Directed Investor Society, helping investors “declare independence from Wall Street.” Contact her at editor@bryanellis.com or visit sdiradio.com.
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