 If
price is paramount, buy home in the fall
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 Dear
Real Estate Adviser,
I just moved back to Minneapolis-St. Paul and am staying with family
members while looking for a house. I have heard that some listed
for more than $300,000 have been reduced by $50,000 after sitting
on the market for a couple hundred days. My family thinks I should
buy toward the end of summer rather than now to get the best deals.
Is this a good gamble?
-- Seymour Lakes
 Dear
Seymour,
It's nice to have a family that is looking out for you -- and they're
probably right about your timing on the house issue. In general,
sellers are more motivated at the end of summer or early fall, especially
families with young children who they need to enroll in a new school,
in a new area of town or a new city. Some sellers might be especially
anxious if they have already moved away to a new locale and find
themselves paying two mortgages.
All of a sudden, that lowball offer they turned down
a few months before will start looking more attractive. And that's
where you come in with a tougher negotiating stance.
However, there's one negative to buying outside of
the peak season, which in most nonresort areas starts around March
and ends in early-to-mid July. While prices outside of this period
may be lower, there will also be fewer properties available, and
the most appealing among them may have already been scooped up by
earlier offers.
However, with a softening in the housing market --
both nationally and in the Twin Cities area -- there should be more
housing stock on the market than usual in late summer and there
should be more owners willing to deal. In a recent report, the Minneapolis
Area Association of Realtors noted that the "extreme nature
of (the) sellers' market was unsustainable and the region has now
begun to experience the expected soft landing for residential real
estate." In other words, supplies are up, and prices are not.
Nationally, sales of previously owned homes dropped
by 2 percent in April, while the total number of unsold homes in
the U.S. rose to a record 3.8 million, according to the National
Association of Realtors.
Not all the news is disheartening. Median home values
for the month of April rose 4.2 percent over the median for April
2005, but that was the smallest year-to-year gain for any single
month since September 2001 and a far cry from the double-digit gains
sellers realized in 2005.
By the way, the only better time to buy by price is
between Thanksgiving and Christmas, according to the National Association
of Realtors. But August through October this year may well be your
most promising time in terms of combining price and choice. Of course,
you may not get that hefty $50,000 discount on a $300,000 home you
cited earlier. Developers and builders of new condos and new-construction
homes are more apt to slash prices severely than owners of existing
homes because they may have already made their aggregate profit
margins on their developments with previous sales.
Continue to be a student of your market. A little
research can translate into a lot of savings. Since you are apparently
content living with relatives (for now at least), you have the luxury
of being patient and pouncing on the right deal.
Good luck with your home search.
To ask a question of the Real Estate Adviser, go
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page, and select "buying, selling a home" as the topic.
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