I’m sympathetic with contrarian investing practices. You’ve likely heard that, in the real estate market, spring and summer are the “buying” seasons. If that’s true, then there is an economic case for improving your purchasing power during the non-buying seasons.
Taking a two mile radius from downtown Austin, we show the average-discount-from-list-price ratio of sale price to list price (subtract from 1 to get the discount) for real estate sold in June and December. The data is obtained from the MLS and goes back to 2004. On average, since 2005, you can buy central Austin property for less in December than you can in June. Last year if you purchased in December then you saved an additional 3% from asking price.
I call it the “December Discount”.
This chart affirms, at least in part, that in recent years buyers purchasing in the “off season” are getting slightly better deals than buyers in spring and summer. Since 2005 you can see the December Discount increasing with each year. With the FHA loans currently filling a void in the credit markets, and a tax incentive bringing more buyers to the table, this year we might not see a continued divergence beyond 3%.