December 2012 Blogs

6 Effects the Holidays Have on Your Local Real Estate Market:

We generally think of the holiday season as causing explosions of bad (if sweet) sweaters, creating waistline expansion and snowballing into bank account shrinkage. But there are loads of less obvious implications of the holidays - both good and bad - in every area of life.

For example, I recently read that household energy use spikes almost 39 percent in December (bad), due to holiday lighting (good) and baking (good) and all the extra time we run the furnace for our holiday guests (good).

Depression and alcohol use go up, but so does charitable giving. Stress goes up, but so do acts of kindness.

What if we applied that same, balanced eye to understanding the effects the holidays are likely to have on your local real estate market and - by translation - on your personal real estate endeavors at this time of year?

Let’s do just that - here are a few holiday market impacts you should factor into your plans and expectations:

1.  Your home’s online marketing becomes uber-important.  Let’s face it - buyers are busy around the holidays. And even where the weather is relatively mild, like here in California, they would rather not spend their warm-and-fuzzy holiday moments traipsing in and out of the rain to view homes that aren’t worth it. Further, the holiday season is the time of year in which buyers are the most likely to visit friends and family member’s homes in neighborhoods they’re not familiar with.

That means two things about holiday home buyers:

•  they are more severe than at other times of year when it comes to weeding out properties they might want to see in person, based on their online listings, and

•  they are more likely to rely on smartphone apps to explore neighborhoods that are new to them - and to investigate the homes for sale in these new areas.

All this has important implications for sellers: it’s more important now than ever that your home ‘shows’ beautifully online (with ample, accurate photos), and that it is priced and described in a way which makes it appeal to buyers as a good value for the money, compared with the other homes that are likely to come up in the same internet search as yours.

Collaborate with your agent to make sure that you’re both happy with how your home is being reflected online, both on its own and by comparison with other listings that your target buyers are likely to peruse. Fortunately, if you can get the listing to a place where you feel great about how your home is listed on, it will automatically show up the same way on the very popular Trulia mobile apps.

2.  Wet weather surfaces property problems.  Home inspectors can and do a whole lot to help buyers avoid post-closing surprises in property condition.  Wet weather helps inspectors, buyers and sellers, for that matter, see things they otherwise wouldn’t.  Roof leaks, drainage issues, flood-prone basements and pump problems are all evident in inclement weather in a way they simply are not in the summer time.

Seeing and selling a home when the weather is bad lets all parties involved be certain that everyone is on the same page about the home’s condition before closing, or that needed repairs are negotiated and/or completed on a timeline that makes sense for everyone involved.

3.  Competition falls.  If you’re a buyer who has been frustrated by multiple offers all year, you’re in luck. Because of holiday season weather, parties, dinners, travels and the like, there are a number of buyers out there who flat out press pause on their house hunts until the New Year.  That means that if you go contrarian and stay in the game, you’re less likely to run into as many multiple offer scenarios this time of year.

And this competition-reducing impact also happens on the seller side: if you’ve had a hard time getting your home seen amidst a crowded field of similar listings earlier this year, the holidays create a great opportunity to position your home as a standout. Some sellers will slow down on showings during the holidays, and a few will even put their listings on hold until 2013. So the sellers who keep their homes on the market and keep them priced, staged and marketed aggressively over the next month have a better chance than at any other time of year of attracting buyers to come see and make an offer on their homes.

4.  Motivation spikes.  When less motivated folks of both persuasions put their plans on hold until New Year’s, net motivation levels on both sides automatically go up. That leaves only the people who are truly ready and committed to make a move still actively in the game.

But some members of this already highly-motivated population will see the year’s end as a psychological closure mark, and get even more serious about house hunting, Open Houses and even negotiating in order to be done with as much of the work of the home buying or selling process as possible before the end of the year (even though escrow won’t close until 2013).

When everyone active in the marketplace is highly motivated, it’s good for all sides. Sellers will only have their holidays disrupted by buyers who are serious about making offers, and buyers might find sellers more receptive to their offers than they did earlier in the year. Additionally, both parties may find that negotiations are a bit less likely to get stuck on small, nitpicks and more likely to be furthered by a spirit of collaboration and cooperation now than at any time of year.

That’s just what happens when everyone involved is ready and highly motivated to move forward.

5.  Halls are decked.  In many areas, homes and neighborhoods are decked to the nines at this time of the year -- decorated, lit and shown off to their very best advantage. This is the case, not only aesthetically, but also in terms of social and community events. This is a great time of year for buyers to evaluate how developed an area’s offerings are in terms of social, recreational and cultural events - or not.

Almost every town’s or neighborhood’s news outlets and blogs are running a steady calendar of local events at this time of year. If you’re in the process of vetting an area to see whether it might be a good fit, or are trying to get a better sense of the neighborhood flavor of a few different districts around town, compare them against each other. Consider showing up to a few holiday-time local events to feel the area and your prospective future neighbors out.

6.  Willpower wanes.  Behavioral economists have called out a phenomenon called ego depletion, based on findings that if you are hungry, tired or have depleted your willpower by exercising it to, say, stay on a diet or spending plan, you are more likely to splurge or make an impulsive decision in another area. This is a critical insight for buyers, who may be trying to keep strict controls on their holiday indulgences in food, drink and gift shopping, causing them to have less self-control - neuropsychologically speaking - when it’s time to make conservative financial decisions about what to offer or spend for their home.

Take care to avoid house hunting - online or off - at the end of a long, holiday festivity-laden day or week, when you’re already tired or hungry. In fact, so long as your agent lets the listing agent know that you’re preparing an offer (just to make sure the home doesn’t get snatched out from under you), it’s not a bad idea to do a pre-offer check-in with your mortgage pro, before submitting it, or even to sleep on your offer price and terms before you send the offer out in the morning.





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