National housing inventory is at an all-time low, making it insanely difficult to buy your first place. But while it’s getting harder and harder to find deals, they still exist. You just have to look a little bit harder and, in some cases, even go against the common wisdom — especially when it comes to picking the best time of year to buy. Most websites and real estate experts recommend that you look for homes in the spring or summer, when the largest number of homes hit the market. But this is also the time when prices tend to be the highest and competition the stiffest.
You should start looking as soon as you get pre-approved and feel that you're in a place to buy, and ideally in July or August when some places might have been on the market all summer and the sellers are more motivated.
If you want to find the best deals, then start looking for real estate when fewer people are shopping — either in the fall or winter. While there will without a doubt be fewer houses on the market, you are more likely to find a seller who needs to sell quickly. And the more desperate the seller, the better the deal. There are tons of reasons why a seller may be eager to move his or her place quickly. The two most common? The place has been on the market for a long time and the seller is getting inpatient or running out of time, or the seller has to move quickly for some reason.
Steals During the Holiday Season
When I was looking for my first place in Chicago, I happened upon a loft that the sellers wanted to unload quickly. Why? They no longer lived in the city and were tired of dealing with landlord hassles. (i.e. The occupant hadn't paid rent in six months!) It was around Thanksgiving time, and I was able to use the time of the year to my advantage and negotiated a $50,000 discount on the property and parking space. If I had found the same place in the spring, I doubt I would have been able to get that level of a discount.
Another quick tip: There are sellers out there (I'm talking about banks) who are extra motivated to get homes off their books before the New Year, so you can find some amazing short sale deals during the weeks leading up to January 1.
'Winning' During the Worst Winter Weather
And inclement weather can be a Godsend. My friend Brian and his wife Melissa, shopping for their first home in Chicago in the spring, were outbid over 20 times before they finally landed on a deal — the following winter. If you’ve never been to Chicago in the winter, let me tell you: It’s, like, really, really cold. No one wants to go house hunting when it’s negative 5 degrees outside. But that doesn't mean there aren't still sellers out there who need to get rid of their homes.
When Time is NOT on Your Side
Another bit of advice: Don't doddle. You should start looking as soon as you get pre-approved and feel that you're in a place to buy, and ideally in July or August when some places might have been on the market all summer and the sellers are more motivated. Then set up alerts for the neighborhoods you like, so you can pounce on deals as fall and then winter approach.