Tuesday, December 22, 2015 / by Derek Gutting
Derrick and Bailee Parr tried following the conventional wisdom.
The couple listed their Broad Ripple house for sale in 2014 ahead of the spring buying season. It's a unique three-story house on an unusually large lot for Broad Ripple. They were optimistic it would sell quickly.
Unfortunately for the Parrs, a lot of other people felt the same way. Many of their neighbors also listed their houses for sale, creating an overabundance of inventory in Broad Ripple that overshadowed the Parrs' otherwise attractive home.
"It was really competitive, and we just ended up taking it off the market," said Bailee Parr, 30, who works in accounting for a health care company.
Now the Parrs are ignoring the advice that spring is the best time to sell. As they consider expanding their family, the Parrs are shopping for a new house in Fishers while preparing to put their Broad Ripple house back on the market after Christmas.
"We've been ready to put it on the market," Parr said. "We had some projects to finish and got them finished right before Thanksgiving."
Although some real estate agents and a few well-meaning family members might suggest otherwise, data show that listing a house around the holidays can pay off.
The real estate website Redfin examined national home sales from March 2011 to March 2013 and found that houses listed during the winter tended to sell one week sooner and fetch 1.2 percent higher prices than houses listed during any other season. The analysis didn't single out Indianapolis, but it found Chicago-area houses listed for sale during the winter had a 52 percent chance of selling within six months compared with 40 percent in the spring.
Similar results can be seen in Indianapolis, depending on the neighborhood and condition of the houses, said Jake Johnson, Redfin's managing broker for Indiana, who is working with the Parrs. A house with updated bathrooms and granite countertops will attract more attention than a house in need of repairs, he said. But for move-in ready houses in neighborhoods close to major employers, Johnson said, there are serious buyers ready to pounce.
"Indianapolis has seen a pretty significant amount of job growth, and a lot of the companies give out corporate relocation packages," Johnson said. "A lot of those jobs get transferred here in the first quarter of the year. I think that's why you see an influx of sold homes in the first quarter of the year — January and February. Sellers that do put houses on the market in November and December typically see those things go in January."
There's a good reason why people think spring and summer are the best times to sell houses: There are more transactions during those seasons. This year, for instance, 3,697 Indianapolis-area houses sold in June and 3,479 sold in July, compared with 1,599 in January and 1,810 in February, according to the Metropolitan Indianapolis Board of Realtors.
Plus, houses sold during spring and summer tend to attract offers that are slightly closer to the original list prices than houses sold during fall and winter. During the past two years, Indianapolis-area houses that sold in May and June fetched an average of more than 94 percent of their original list prices. That number has ranged from 91.5 percent to 92.9 percent from January to March.
But, as the Parrs learned, there's also much greater competition during the warmer months. More than 4,500 new listings hit the market each month from April to June this year, compared with 1,974 in December 2014 and 2,796 in January. And the weeks around the holidays bring out the most serious buyers of the year, Carpenter Realtors CEO David Caveness said.
"We could say, 'Sure, wait until after the holidays because there will be more buyers in the marketplace after the holidays,' but the reality is there are no benefits to waiting," Caveness said. "Buyers are still in the marketplace. People who are literally scheduling appointments to come into your home, if they're doing that in November and December, they're pretty serious. Some of these people have to find a home before the end of the holidays. They're transferees and need to move their kids before another semester starts in January.
"The difference is in December there's less people out there just shopping, just kicking the tires."
The holidays also provide a few additional opportunities for buyers to get out and see houses. Jill Cook, a 29-year-old paralegal, wasn't out shopping for door-busting electronics or appliances on Black Friday. She was viewing houses in Noblesville with her husband, Ryan Cook, a 31-year-old software engineer.
"I just didn't plan to go shopping, and I had the day off," Jill Cook said. "It worked out well."
Mild weather, such as the 50- and 60-degree days that have popped up in recent weeks, also can work in a seller's favor, said Jim Litten, president of F.C. Tucker Co.
"If we have a moderate December weather-wise, that will be better for us sales-wise than if we have snow up to our knees," Litten said. "When snow and ice comes, only the heartiest of souls are out there looking at real estate."
F.C. Tucker, one of Indianapolis' largest residential real estate brokerages, will sell 600 to 700 houses a month during the winter months, compared with 1,000-plus during the summer, Litten said.
"Typically, our business is a bell-shaped curve," Litten said. "It starts slow in January, starts ramping up in February and a little more in March, and April, May, June and July are the crest."
Although the lower sales volume in winter shouldn't be a deterrent for sellers, Johnson of Redfin said it should cause sellers to be realistic about the value of their house.
"The people that are poised to have great success in the winter are the sellers that recognize the buyer pool is a little bit smaller," Johnson said. "So the ones that price their house correctly will have the negotiating power and tend to possibly create bidding wars on their property and get a lot closer to their list price than the summer when there's so much inventory out there and people are making lower offers."
Sales in December and January have been on the rise during the past two years. From December 2014 to February, Indianapolis-area home sales grew nearly 13 percent each month from the previous year. That's better than the 8.4 percent year-over-year sales growth the market had seen over a 12-month period as of October, the last month for which MIBOR data are available.
"If you get away from the actual holiday dates, January and February have been pretty big around here," Johnson said.
That's what the Parrs are counting on as they shop for a new home and hope to sell their Broad Ripple house. Having done their research and tried the spring housing market once before, they're happy to be navigating the housing market around the holidays.
"We have a very niche home, so it's going to take a certain buyer for sure," Bailee Parr said. "But we've been talking to a lot of listing agents since we've been touring homes, and we're confident we'll be able to sell very quickly. I don't think there's a lot of inventory in the Broad Ripple area right now."
Call Star reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.