Why is January 22 the best day to buy a house?
Every year we hear the rumours: Winter is the best time to buy a house.
To be frank, the rumours are true.
What’s better is that we can narrow this general statement down to a specific day. Turns out, the best day to buy a house in Greater Vancouver is January 22, 2019.
There are a number of reasons why this is the case, but here are the two biggest:
- decreased competition (as fewer buyers are house-shopping during cold, wet winter months)
- along with seller fatigue (since anyone who lists a house for sale during the winter months is typically being prompted by a major life event, rather than a simple choice).
How do we know what the best day is to buy?
It started nine years ago when a now-defunct brokerage based out of Toronto (known as TheRedPin) decided to analyze the market. By going through more than half a decade of sales data on just over 650,000 Toronto-area transactions, they were able to pinpoint the one day that would offer home buyers the best chance of getting a bargain. That day was the Tuesday of the third week in January. This exercise was repeated the next year and, sure enough, the same results.
Why the third week in January?
The theory is that sellers with homes on the market during January are motivated to sell for reasons other than a lifestyle choice. Perhaps they are facing financial hardship, or they got a job promotion that’s taking them to a different city, maybe they are going through a divorce, or perhaps they bought a place in late-fall the year before and now they must sell their current home to avoid carrying two mortgages. Whatever the reason, there is a need to sell which puts the seller at a disadvantage.
Also, quite often sellers with homes on the market in the winter have to wait longer to sell their home. This translates to more open houses, more viewing appointments, more cleaning and a greater struggle to keep the house in tip-top shape. This can lead to seller fatigue.
Finally, there are fewer buyers in the winter months, particularly in December and January, since this time is so close the holiday season. It’s also why the third week of January is the best time. By the third week, most people are back into the swing of things. Kids are back in school and back to their routine; people are back and work and schedules are in place.
Home buyers can save, on average, about $60,000
We crunched the numbers for the last 10 years and found that, on average, Greater Vancouver home buyers save 5.5% if they buy in January compared to buying in the peak of the housing market in May. Home buyers in the Fraser Valley save 8.5%.
If you take the average house price in December 2018, this translates into a savings of just under $60,000 (or between $57,557 and $59,304) if you were to buy in January, rather than waiting for the spring market.
|Ave. Home $ Greater Vancouver||Ave. Home $ Fraser Valley|