‘Tis the Season: Holidays are a good time to buy a home

Interest rates are still very low, and inventory has been high, but houses are selling faster these days and inventory is lower. And the holidays are a most exciting time to have houses on the market. Why? Our houses are never so warm and inviting.

And not just warm from the toasty fireplace but from those little touches you may add to your home in celebration of the season. “The rest of the year, when people are distracted by stuff (details of the house they don’t like), then they bypass the house. At this time of year … all they’re thinking about is, ‘Wow. Look. If I buy this house, look how nice it can look. And I can put the tree in the same spot that they have it.’ It helps them envision the warmth of the holiday season, which at any other time of year, guess what? They’re not getting, so in that respect, it’s actually helpful to have decorations up. People buy on emotion.”

Of course, that doesn’t mean you should go overboard on decor. No one will be able to notice your generous yard if it’s covered in a family of 8-foot-tall inflatable snowmen.

“I know the children love outdoor lawn decorations, but I would not spend the time setting them up when trying to sell your house,” says Gara Cole, The Northrop Team’s Accredited Staging Consultant.

Instead, she says, stick with natural decorations, including garlands and berries, pine cones in baskets and holly. Lighting should be subtle, she says, and holiday lights should be used sparingly. (She suggests only mini clear lights.)

And this year, the holiday season will be particularly bright for first-time homebuyers who will get a gift of $8,000 back from the government if they purchase before April 30, 2010. And what’s even more amazing is the credit for repeat buyers – anyone who has lived in their home 5 years or more (and owned it for at least 8 years) can get $6,500 back.

So think about that timing. If they need to buy before April 30th, then they will start looking NOW. It’s silly to wait until February or March to go on the market – you will miss this flurry of activity happening right now!

Obviously, the peak months of real estate are May, June, July and August (that each make up about 11% of home sales). December home sales usually make up about 8.1% of the total annual home sales. Here are 5 reasons the 2009 holiday season promises to be filled with better-than-usual home sales:

1. Steady Mortgage Rates – interest rates and home prices are at all-time lows and are likely to stay there in the near term. If we look historically at interest rates, they typically drop every December through January, so we could see them drop even lower this holiday season. They have to come up sometime, but it won’t be during the holidays.

2. Motivated Buyers – with unemployment rates still high and looming holiday expenses, many home buyers who are searching over the holidays are extremely motivated. Most are trying to buy before the end of the year for tax purposes as well!

3. Less Competition – With many people gift shopping, traveling and entertaining, November and December are traditionally slow for real estate. On the ball sellers can take advantage of this fact and find less competition. Your home ill stand out! And again, there is a surge of buyers in the market right now because of the new tax credit and even MORE SO because of the expansion, so typically these people would not have a reason to go house hunting over the holiday – but they are out there!

4. Quicker Closings – fewer transactions means faster closings. November and December are historically slower months in the mortgage business so things get done faster. Not only that, financial institutions and lenders that are looking to close the books on 2009 may be more willing to act quickly to get a transaction.

5. Tax Advantage – most settlement costs paid to the mortgage company lender or broker are tax-deductible in the year in which you pay them, if you close on or before Dec 31 you may be able to deduct the interest on your first monthly mortgage payment from your taxable income and you may be able to deduct points paid to reduce your interest rate as well.

Start your home search now! Interested in a no-obligation market analysis? Request one now!


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