A lot of my clients ask me if there is a good time to buy a house or condo in Florida. I had an idea that some months were better than others for negotiating a lower price. But when I did the research, I found that although the months I thought were good, I found even better times to buy a house or condo in Florida. What I mean by better is that sellers were willing to take even less money for their homes than any other month of the year.
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Were there more cash buyers in some months than others? If you are buying a home in Florida with a mortgage, the cash buyers may win over you at certain times of the year. But, there are months where the cash buyers were less prevalent.
Now, I know it all depends on the motivation of the seller. Afterall listing agents have provided past sales history of the area and have consulted the seller on how much their home should sell for in today’s market. But, numbers from the MLS in Sarasota County show there is actually a good time to buy a house that supersedes other times of the year in Florida.
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Although you may not be looking in Sarasota, Lakewood Ranch or Bradenton areas to buy a home, if you are looking in a vacation or retirement destination in Florida, chances are there will be some commonality with the outcomes.
- 🔑Factors That Influence Best Time of Year to Buy
- 🌴When is Season in Florida?
- 💸Is Cash Better?
- 📊Sarasota County Real Estate Sales by Month
- 📉January Real Estate Sales Sarasota
- 📈May Real Estate Sales Sarasota
- 📍June Real Estate Sales Sarasota
- 📚Summary-Best Time to Buy a House in Florida
- 🔎Search Homes for Sale in Lakewood Ranch Here🔎
🔑Factors That Influence Best Time of Year to Buy
See the Article: Purchasing a Condo in Florida
There were several factors I used to help me determine when the best time to buy a house in Florida. Some outside influences were not considered such as the interest rate and the overall health of the economy. However, what I did look at and take into consideration were the following:
🏡Housing Inventory: How many homes did a buyer have to choose from? Was there too much inventory? Were homes in short supply? This is just a basic supply and demand issue. But price and how much a buyer can negotiate plays a big part in the best time to purchase. The shorter the supply, the higher the price.
📅Days On Market: Days on market tells us how long the home was listed for sale before the seller and buyer came to a meeting of the minds and the house went under contract. Price and time do go hand in hand. Days on the market also tells us about a consumer’s desire to pay a certain price for the location, size, and amenities of a house. In addition, if a home is overpriced, then it will take longer to sell.
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💰Original List Price to Sale Price Ratio: How much did the seller start out asking and what did they end up selling their home for? If the seller took multiple price reductions, the percentage will be lower. The higher the percentage, means the seller didn’t have to take too much off the home price. A list to sales price ratio helps determine how much less $$ the seller took. Original List Price indicates the initial starting price.
🌴Florida Season: How many people are residing or visiting Florida on vacation. The higher the demand, the less a seller has to take off the price of a home. If many buyers are vying for the same house, sometimes the sales price can exceed the list price.
🌴When is Season in Florida?
We Floridians call “season” a time where our neighbors from up north come down and spend some time enjoying our sunny, warm weather in the winter months. It seems like the harder the winter up north, the longer the season gets extended.
The season starts out soft in late November with the Canadians typically arriving just after Thanksgiving and leaving around April. Currently, they are only allowed to stay in the US for 182 days. So, they plan it very carefully.
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High season in Florida usually begins in January and can go to May. Most of the US northerners leave sometime in April/May unless winter is prolonged.
Also, the worse the winter up north, the better the real estate business is in Florida. There is a tipping point with people that are on the verge of wanting to get out of the cold. When the weather is harsh, long and just plain drab, those buyers may move up their plans to buy a home in Florida.
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💸Is Cash Better?
Does a cash buyer influence a seller to take less for a home? It depends on the market. I have sold in real estate markets where most of my sales were cash. So, I have a few takeaways from sellers and how they perceive a cash buyer. First, sellers may be willing to take a little less for their home on a cash transaction, but there is a limit.
Cash can make the real estate transaction a little more convenient, as well as quicker. For instance, a typical mortgage takes 30-40 days to close.
The house must appraise, which can be a risk. More appraisers are becoming conservative on appraisal values. The home must appraise at the sales price. In addition, certain loans require the home to be in pristine condition.
Risk of being denied the loan. Final mortgage approval for a home purchase comes just days away from the closing date.
Unfortunately, this is out of the real estate agent’s control and the seller’s. The seller’s home is off the market (or taking back up offers) and it is truly a waiting game.
If the buyer doesn’t perform, does something reckless financially, dies or loses his/her job chances are the sale is off. That is terrible for everyone. The disappointed seller now has to start all over again!
That is why cash can be an attractive sale for a homeowner.
If you are buying a home with a mortgage knowing which months are prone to cash buyers may be something to consider. The less competition you have with a cash buyer, the better.
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📊Sarasota County Real Estate Sales by Month
Let’s take a look at each month of closed real estate sales for Sarasota County. This graph shows sales from the end of summer 2018 to peak in the summer of 2019.
You can see that December and January had the least amount of sales for the past 12 months. January starts our season, therefore, most buyers are just beginning to shop for a home. So, I am not surprised to see the volume of sales is less.
So, if sales are down in January, does that mean that January is the best time to buy a house? Let’s take a closer look at January’s real estate sales in Sarasota.
📉January Real Estate Sales Sarasota
Does a slow real estate sales month in Florida equate to buyers being able to negotiate a better deal on a home?
A quick assumption would be, that if there are not a lot of buyers and plenty of inventory that a willing seller would take less money for their home. Right?
Not so quick. If we go back to the criteria previously mentioned, we can see if January actually is a good time to buy a property in Florida.
Housing Inventory January 2019 in Sarasota
🏡Housing Inventory: The month of January saw a nice increase in housing inventory with over 2,000 new homes being listed for sale.
New pending properties are defined by how many homes went under contract the month of January. Sales were fairly robust with over 23% of the homes available going under contract.
Did the buyers in January get a better deal on a home?
📅Days On Market: It only took an average of 73 days for a buyer and seller to agree on terms and price on a house.
Considering this was one of the slowest sales months with ample inventory, sellers were attracting buyers with price, amenities, and location in a little over 2 months.
💰Average Original List Price to Sale Price: 93% Although January was a slow sales month, the days on market were fairly low, and the sellers did not take too much off their asking price.
The seller might have taken at least one price reduction before accepting an offer from a buyer. Knowing this percentage tells us how motivated the sellers are and if perhaps one price reduction was taken before they found a buyer.
How Many Cash Buyers in January?
💸Over 47% of the buyers in January paid cash for their property. Even though there were quite a few FHA and VA loans used to finance a home, cash was still prevalent in housing purchases in Sarasota.
It could be that the homes purchased with a mortgage competed with some cash buyers and perhaps, home prices held steady without much price reduction.
📈May Real Estate Sales Sarasota
We have looked at the slowest sales month in Sarasota County (January), now let’s look at the strongest sales month-May. If the majority of buyers made their offers in the month of May, then maybe May is the best time to buy a house in Florida.
We will use the same parameters, housing inventory, days on market and the original list price to the sales price to see.
🌴Florida Season: May is the end of the winter snowbird season. It would seem that a seller would be more motivated to drop the price since many of the buyers will be heading home shortly.
May 2019 Housing Inventory Sarasota County
🏡Housing Inventory: The month of May showed less housing inventory than January. There were a total of 4,833 homes available for sale in Sarasota County. 30% of the housing inventory sold the month of May.
With less inventory and higher buyer demand, did home prices hold steady?
📅Days On Market: It took 86 days for a seller to attract a buyer. Although May was a robust selling time, it did take longer for a seller to find a buyer. Homes that were placed on the market in January preparing for the spring market finally found their buyer in May.
💰Average Sales Price to Original List Price: 92.6% is a slight decrease from January. In May, you can see that many sellers had to reduce their initial list price in order to find a buyer.
Because the time on the market increased in May, we can speculate that many sellers tried a higher price initially for their home and had to reduce it to attract a buyer. Even though there was a higher demand for real estate in May, sellers took less money for their home than in January.
How Many Cash Buyers in May?
💸43% of the buyers who purchased a home in Sarasota the month of May 2019, paid with cash. That is down by 4% compared to January. You can also see an increase in federally insured or backed mortgages (FHA & VA). More buyers secured a home purchase with a mortgage. So, there was less competition with cash buyers.
📍June Real Estate Sales Sarasota
I have to be honest, Sarasota is hot and humid in June. But, what if I also told you that if you were willing to sweat it out, you might save yourself some money.
Would you consider it? I honestly thought July was the best time to buy. That notion was based on my personal experiences and the deals I have negotiated for my buyers. But a little more research and June seems to be just a little bit better.
So, let’s check it out.
Housing Inventory June 2019 for Sarasota County
🏡Housing Inventory: In June, the housing inventory (4,426) shrank compared to January (5,672) and May (4,833). The properties under contract were less as well. Roughly 29% of the housing inventory went under contract.
Not only were there fewer homes available to buy, but you can definitely see the listing trends. Sellers begin to put their homes up for sale at the beginning of Florida Season.
Did June Buyers Get a Better Deal?
📅Days On Market: 86 days to procure a buyer. There wasn’t any change from May to June when it came to how long it took to attract a buyer to a home.
I was a little surprised by this. Since our summer is now in full swing, I thought perhaps it might take longer to find a buyer for a home.
💰Average List Price to Sales Price Ratio: 92.4% This was lower than any other time of the year.
Also, take a look at the Ratio of Average Sales Price to Average Original List Price it was 89.8%, that was even less! The average sales price was also lower in June than in May and January. **On average, more sellers took price reductions than any other month**
How Many Buyers Paid Cash in June?
The percentage of buyers paying with cash for their home purchase declined from May. 40% of those homebuyers paid with cash. That is a decline of 7% from January.
Buying a home in Sarasota the month of June can save you money. In addition, if you are looking to purchase a home with a mortgage, you will find fewer cash buyers than in January.
📚Summary-Best Time to Buy a House in Florida
When is the best time to buy a home in Florida? The answer is when you need one! However, if you are willing to wait and time your purchase, there are a few months that could save you thousands of dollars.
I just want to condense and recap my findings on Sarasota County home sales.
- Florida Season does play a factor in housing demand and prices in Florida. Although January, which kicks off the season, is somewhat slow for home sales, sellers held firm on price and took fewer reductions.
- More buyers paid cash in the month of January.
- May was the peak selling season in Sarasota County. Although May had more buyers, less paid with cash.
- More sellers reduced their home prices in May than in January.
- In June, the housing inventory was down.
- More buyers paid with a mortgage in June than in January and May
- In June, sellers took more price reductions or sold their homes for less $ than January or May.
⬆︎January through May, although there was adequate housing inventory, it was more of a seller’s market than the summer months. Sellers especially in the early part of the season, speculate that more buyers will be looking for homes and therefore put their home on the market and negotiate less on home prices.
In June, the season is over and there is less housing inventory and demand. However, the buyers that are shopping are able to secure on average a lower price and typically finance their purchase.
⬇︎Moreover, the average price of a home purchased was lower in June. If you are looking at homes in June, above the average sales price, seriously consider making your purchase the month of June.
More sellers in the higher price points because of lack demand will more than likely be willing to work with you on price.
Negative: Buying offseason, whether it is for a snowblower in April or outdoor furniture in the fall (if you live up north) you may be able to get a better price, but your selections might be limited due to a reduced inventory.
If you are looking for a unique home, or have specific requirements, buying offseason, might not be your best bet. However, if you are willing to compromise, just a little, you could keep from losing thousands and thousands of dollars.
🔎Search Homes for Sale in Lakewood Ranch Here🔎
Frequently Asked Questions
Builders in Florida offer buyer incentives more often during two times of the year.
1. One is the builder’s fiscal year-end. Builders want to show a good bottom line and they will give better deals usually a month or two from the end of their financial year. This is will be on Spec Homes only-fast closings before the end of their year.
2. Off-Season. If a builder in Florida is sitting on inventory in the Summer months, they will be a little more motivated to make a deal. I have been able to get thousands of dollars off the purchase price in the summer months.
If you don’t mind coming down here in the summer months, you can save yourself not only thousands of dollars but you will have less buyer competition as well.
The Sellers took less for their homes in the months of June and July here in Florida.
The best place to buy a house in Florida is going to be determined by your lifestyle and budget.
Large cities on the east coast of Florida, for instance, Miami, Ft. Lauderdale, and Hollywood are more expensive than areas such as Sarasota, Naples or Bradenton, FL.
Florida’s housing market has recovered in most places and the economy is booming. Home prices have continued to rise in most areas.
Florida is one of the few states that does not have an income tax.
With the interest rates at an all-time low, many people are purchasing homes in Florida for retirement, investments and second homes.
I have been in real estate sales for over 20 years. I am originally from the Midwest and have been living in beautiful Florida for over a decade. My career sales are over 2,100 homes sold. There aren’t too many obstacles I haven’t encountered throughout my work history. I provide you with honest advice backed by years of experience and understand that a real estate purchase or sale is a top priority for you. Nationally recognized. Licensed FL Real Estate Instructor. Contact me at Sandy@SandyWilliams.com or call 941-564-9491