Why autumn and winter may be the best time to buy
“Timing is important, even critical”! is something you may have already heard in a variety of different situations by a variety of different people. The same goes for the well-coined expression “ timing is everything”. There is a good reason why these statements mean so much. After all, they are well-founded and accurate statements that can be applied to many situations.
So how does it apply to real estate?
For home buyers, especially, how and why is timing important in the process of searching for a new home? Furthermore, how can you identify and take advantage of good timing? An article by Inc.com explained that “timing is merely a function of finding the right balance between supply and demand and these are merely techniques for accomplishing that goal... You can afford to get a lot of other things wrong if you get your timing right.”
Now, if you have found and hired a great real estate agent to guide you through the home search and home-buying process in Portugal, then it is unlikely you will “get many things wrong.” However, it still remains true that timing is everything when you are looking to buy a home in Portugal.
As is the same in other parts of the world, there are, essentially, certain times of the year when buyers may stand to save significant amounts of money in the Portuguese home-buying process or on the agreed purchase price. By understanding this fact and knowing when the ideal time to buy is, you are able to give yourself an upper hand and take advantage of this to ensure you find a great house for a great price.
Many buyers refrained from taking advantage of the hot selling summer season in Portugal in 2022. According to recent data, this was due to a) lack of affordable homes; b) rising home prices; and c) higher mortgage rates. Home sales fell to their slowest pace in two years this past summer.
This wasn’t due to the market slowing down; rather, sales fell because buyers simply couldn’t find the right home for them — a home that would meet their needs yet fall within their price range. As the end of summer is upon us and we head into cooler weather and the winter, the market will likely shift slightly, giving buyers a leg up going forward. In fact, here is a little insider secret for you in your search to find a home that meets your needs: as we speak more property owners are beginning to enter their properties into the market.
Meaning Autumn and winter may be the best seasons and times to buy a home!
Focus on Autumn and Winter, Not Spring and Summer
Does this surprise you? Many people will tell you that spring is the buying season in real estate. The Portuguese property market often appears to be booming in spring and summer, and with the return of the warmer weather, many buyers think that spring is the best time to look for homes.
One of the main reasons for spring and summer being big real estate seasons is that many buyers, particularly international buyers, will tag their home search trips with a short break away over key holiday periods. This allows them to enjoy the warmer weather Portugal offers at that time of year.
Another reason buyers prefer to shop in warmer months is to move into their newly purchased Portuguese property and enjoy the summer. If they are relocating and have school-aged children they will want to be in before September, so as not to disrupt the school year.
Analysis of home sales in key areas using two years of data, discovered two key findings that work to a buyer’s advantage:
1) Sale prices begin to drop in autumn; and
2) Home sale prices are typically lowest in winter.
Market conditions during the autumn and winter, therefore, tend to lead to more opportunities as sellers may consider dropping prices after the spring and summer seasons end, in an attempt to get their property sold within the current fiscal year.
Sale Prices Begin to Drop in Autumn
While home sale prices don’t usually drop dramatically as summer turns into autumn, the final sale prices do take a significant and noticeable dip. According to data sometimes sale prices can drop from summer to autumn on an average of 2.96%, which equates to €9,700 on the median home.
Home Sale Prices Are Typically Lowest in Winter
Many buyers are averse to the idea of buying a home in the colder months, but if you can hold off until December or January (generally not very active months in the housing market), homes can cost 8.45% less, on average, as compared to summertime. Of the key areas analysed 60% had the lowest home sale prices in December, while 40% had the cheapest prices in January.
Sellers are often encouraged to wait until spring to list their homes and those who keep their properties on the market through autumn and winter may be more willing to negotiate a deal. Because of the reasons outlined above buyers often miss out on the savings that could be theirs if they were to hold out until winter. As a buyer, you need to learn how to take advantage of lower prices in autumn and winter!
Research Pricing Trends
Do some research into recent pricing trends in the specific area of Portugal you are looking to purchase. You can go online to look at statistics or talk to the team at Private Luxury Collection about pricing trends and whether they match seasonal recommendations.
This extra information will help you determine whether buying in the autumn or winter is the right decision for you. The bottom line is that you want to find the right house for the right price. As experienced agents, we will help you figure this out especially if you have a hard time understanding pricing trends or don’t have the time to do enough thorough research.
Spring is generally considered the hottest, most active season in real estate- While you might not get the best price for the home you want, you will definitely have more homes to choose from. Historically, sales in the months of April, May, June and July account for 40% of the year’s total home-selling volume. Regardless of what time of year you choose to search and purchase your home, you need to move quickly when you find a home that you think could be “the one” for you.
If you’d like to discuss pricing trends over autumn and winter or want more information on the process of buying a home book a FREE buyers consultant now!