Why November's the Best Time to Start Looking for a Home in Escondido.
As the sycamore and willow leaves start to fall around Lake Hodges and the air gets autumn-crisp at night, the San Diego housing market cools down. But if you’re ready to buy an Escondido home, there may be no hotter time to start the search.
Trulia, an online real estate resource for home buyers and renters, recently released a report concluding that November is the best month for home-hunting. The organization found that starter-home supply peaks in November and rises 7 percent in the fall months, compared with the spring. That results in home prices that are 4.8 percent and 3.1 percent lower in the winter and spring, respectively, than in the summer, the busiest home-buying season.
The Trulia report aligns with an analysis released recently by ATTOM Data Solutions, a real estate database. ATTOM reported that home buyers get the best deals in February, when the median home price is 6.1 percent less than the rest of the year, on average. These findings were based on public home-selling data from 2000 to 2016.
Buying a home could be a long process. If you are going to seal the deal in February, you need to be making offers in December or January, which means you should start looking as early as October or November, said Daren Blomquist, ATTOM’s senior vice president.
How the fall housing market aids buyers
The fall house-hunting guidance holds particularly true for Escondido buyers, many of whom tend to be young professionals without children, experts say.
“They are not as tied to the Bernardo Elementary school calendar,” said George Ratiu, managing director of quantitative and commercial research of the National Association of Realtors. Conventional wisdom says the fall season is the best time for first-time buyers to look for houses because home prices are likely to drop as more houses come on the market and families with children have either moved or stopped looking.
People searching for starter homes also enjoy more flexibility than existing homeowners looking to move.
“The catch-22 is that if it’s a good time to buy in the fall, it’s a bad time to sell,” Blomquist said. “So it’s kind of a wash for move-up buyers. Whereas first-time home buyers don’t have to worry about the selling of the equation.”
New buyers still face many obstacles
However, it can still be a challenging market for first-time home buyers, and it’s getting tougher, experts say.
Supply and demand
Nationally, housing supply has been shrinking over the past few years. It has tightened even more in 2017 than in previous years. Existing homes available for sale at the end of August fell 2.1 percent to 1.88 million and were down 6.5 percent from last August, according to the NAR.
It would take 4.2 months for the houses on the market to be sold at the current pace, down from 4.5 months a year ago. (Six months is considered a balanced buyer-seller market.)
But the demand for housing has been growing as a result of an improving economy and increasing job opportunities.
“Prices had nowhere to go but up,” Ratiu said. Homebuyers “have more money, but there are not enough homes on the market, and the price of homes has outpaced their income, which makes it hard for them buy.”
Nationally, the August median sales price of existing homes, which starter buyers tend to purchase, was $253,500, 5.6 higher percent than last August, according to the Realtors’ association. Meanwhile, wage growth remained fairly stagnant, at around 2.5 percent, the Bureau of Labor Statistics reported.
The NAR on Tuesday reported that Pending Home Sales, a future-looking indicator, fell 2.6 percent in August compared with last year — its lowest reading since January 2016.
“When I see pending sales declining, it’s likely sales for the next month will be down,” Ratiu said.
Ratiu said that much of the declining sales was the result of the Escondido housing shortage, which indicates that people looking to buy a home in Lake Hodges may not be able to find a house for sale. But if they can buy, fall months are still a good time to snag a suitable home, Ritiu said, because the slow sales season gives starter home buyers that edge in a tough seller’s market.
“If first-time Lake Hodges homebuyers are competing with buyers who have bigger down payments, which typically you would have with a move-up buyer, they are going to lose out more often than not in that situation,” Blomquist said. “So if they are willing to buy when other buyers are dormant or in hibernation, then they could get an edge and face less competition.”
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BTW, LOVE this photo: