Why It’s Cheaper to Buy a House in the Winter (Even in LA)
It might seem obvious weather would be a factor but prices vary significantly even in places where summer and winter are tough to distinguish, including LA and San Diego. These seasonal shifts are well documented, but many “seasonally adjusted” pricing indexes have failed to account for them. Silvana Tenreyro, a London School of Economics professor who is proposing a model to correct this oversight says, “In summer, there are many houses for sale, people find their ideal home quickly and are willing to pay more. While homes generally cost less in winter, there are fewer to choose from—and thus when it’s harder to find your ideal size, color, style, etc.”
However, the most important factor has to do with the timing of the school year. “Parents of school-age children find it more convenient to search in summer. The group’s disproportionately large impact accounts for a snowballing effect. Because there’s this critical mass that prefers searching in summer, sellers put their houses on sale in the summer. And because more houses are for sale, other buyers also then prefer to search in the summer and so on and so forth. In this way, the unique preferences of a relatively small group of home buyers end up dictating the market for everyone else.”
