California is the real estate capital of the US, and this is certainly no surprise with its massive economy, strong job market, great weather, and numerous recreational hotspots. However, buying a home is a major decision and one that should be carefully thought through. Many people consider things like where to buy a house and what type of home they should purchase, but they rarely consider when is the best time to buy a home in California.
Like most markets, prices within the California real estate market fluctuate over time in response to things like housing supply and demand, as well as other factors like interest rates, the condition of the national and state economies, and other local factors. While all this makes timing the market difficult, here are a few tips to help you out.
Target the Fall Season
Housing prices fluctuate yearly, typically in response to housing supply and demand. During the spring and summer, sellers usually flood the market with new listings. Normally this sharp increase in inventory should drive prices down, but it’s matched by a strong demand created by an influx of buyers hoping to capitalize on the increased number of new listings and move in during the warmer months. So during this time, you will probably have more options, as well as a great variety of cheap homes for sale in California, but you might also have to contend with higher prices driven by demand.
Housing prices have historically been their lowest during the winter months for several reasons. One major reason is that new home listings fall significantly during this period leading to a contracted supply of new houses, and also there is a similar fall in interested buyers as well. This leads to a situation with low median listing prices but also fewer available options.
Therefore, according to most sources, the best time to purchase a home is within the fall season, particularly around September. The combination of a respectable inventory of listings and reduced buying pressure means you have many viable options to choose from, and you don’t have to contend with the high prices triggered by the spring/summer buying frenzy.
Tips on How to Get the Best Housing Deals in California
Knowing when to buy a home is one thing, and being able to capitalize on the opportunity is another. Here are a few tips which you can use to get the best deals when the housing market is most favorable.
Use an Experience Realtor
Finding a trustworthy and reliable realtor who is well-versed with the Californian real estate market and can help you get the best deals at the right time is an important step. This means a realtor who is familiar with local zoning laws, property taxes, Homeowners Association rules, and a host of other things you have to consider before purchasing a home. You can ask friends, family, or colleagues within the state for referrals or check online reviews as well.
Start Saving Up
Just because the peak buying season is gone doesn’t mean you should shelve your plans to buy a house until next year. This gives you a great opportunity to start saving up for your down payment and other important costs like closing costs, home inspection, insurance, realtor fees, and other important expenses that all follow buying a new house. It’s also a good idea to save up an emergency fund that can cover your mortgage payments for a few months in the unlikely event that you lose your job just after moving.
Get Your Finances in Order
According to current stats, nine out of ten people buy a home using a mortgage loan. To obtain a loan from a mortgage company, you will need to be pre-approved for this loan. This simply means they will go over key factors within your finances and determine how much money they can loan you or whether you’re eligible for a loan.
Therefore, it’s a good idea to improve your credit score with the time you have, focus on paying off recurring debts, and drive your debt-to-income ratio below 45-50%, with 36-40% being a healthy target. Also, try to spend less of your monthly income, as lenders generally want their clients to have as much disposable income as possible before starting mortgage payments.
Do Your Research Early
Don’t wait until the best buying time to start looking for properties. It’s never too early to start researching potential neighborhoods and properties online and familiarizing yourself with some of the important features you should look out for when buying a house.
Finding the best time to buy a home in California can be tricky. So, this tips section is for those who want to make it short, sweeter, and probably save some money as well.