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Selling Your Home? Don't Put Your Plans on Ice Over the Winter

December 30, 2014
Selling Your Home? Don't Put Your Plans on Ice Over the Winter

Editor’s note: This is the first of a two-part Ticker Tape Perspectives series on pointers for selling a home during the winter.

Whew! You’ve survived another holiday onslaught. Congratulations.

There are probably any number of things you’d rather not think about right now—like selling your home. We understand the feeling. However, if you’re a homeowner who believes a move might be in your future, there are good reasons to at least consider putting your home on the market even though Old Man Winter is just settling in.

In 2015, the U.S. housing market is expected to continue its recovery from the Great Recession, albeit at a slower pace. Existing home sales nationwide are projected at 5.3 million, up 8.2% from 2014, according to Lawrence Yun, chief economist of the National Association of Realtors

Median house prices will rise an estimated 4%, Yun said, compared with a gain of 5.8% through the first 10 months of 2014 and a jump of 11.5% in 2013.

“The improving job market has consumers feeling more confident, and the rebound in home prices is building household wealth for homeowners and giving them the ability to sell after waiting the last few years,” said Yun.

This appears to be good news for homeowners. So why not kick back and wait till the warm-weather selling season? Yes, sales activity and average selling prices are typically strongest in spring and summer and weakest in January and February. It’s counterintuitive, but there are advantages to going to market over the winter, real estate experts say.

Selling a home is hard work whatever the time or year or market conditions. That means you need to think critically and creatively for ways to get a leg up. As with investing, sometimes it pays to be a contrarian and recognize that the “conventional wisdom” is often too much of the former and not enough of the latter.

Here’s a few reasons not to put a home sale on the back-burner over the winter:

  • Less competition - Inventory on the market tends to be lower in the winter. You'd rather be one of five prospects for a given buyer, for example, than one of 20.
  • More motivated buyers – Winter tends to bring out people who are more serious about making a deal, as opposed to the tire-kickers. After all, who wants to trudge through all the snow and slush if they don’t actually intend to buy reasonably soon?
  • Interest rate anxiety - Some buyers may be itching to get a jump on a widely-anticipated increase in mortgage rates in coming years.

Yun expects the Federal Reserve to raise its benchmark fed funds rate at some point during the first half of 2015 (you have to go back to June 2006 for the central bank’s previous hike). Rates for mortgages, along with those for Treasuries, credit cards and most everything else, probably will follow suit (see figure 1). 



The yield on the 30-year Treasury bond (red arrow) can provide an indicator for long-term mortgage rates. Information on Treasury yields is available on under Research & Ideas. Source: TD Ameritrade. For illustrative purposes only.    

Analysts forecast U.S. average rates for a 30-year mortgage will climb to just under 5% in 2015, from slightly above 4% in December.

On a more basic level, winter home sellers still need to play smart, said Gary Rogers, a regional vice president with the NAR. Whatever the weather conditions, “it is safety first,” he said. “Keep your walkways and driveways well shoveled. There is curb appeal with a light layer of snow. When a house is lit up nicely, it looks like an oasis in the cold.”

Remember that “how you live in your house and how you sell it are two different things,” Rogers added. Once the holidays are over, ditch the tree and other holiday decorations quickly. “Don't keep the tree until the second week of January,” Rogers said.

Winter sellers should also tend to several other matters to make sure they’re ready for market. Be sure to read the second part of this series for more tips on cold-weather home selling efforts next week in Ticker Tape Personal Finance Perspectives   

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