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Do home prices drop in the winter?

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Winter home prices

Realtor Julie Kirkiewicz of Keller Williams Realtors, right, talks with potential buyers Scott MacDonald, center, and Dena Stickman, left, as they look at a home in St. Louis Hills in St. Louis on Thursday, Jan. 31, 2013. Photo by Stephanie S. Cordle, scordle@post-dispatch.com

Can you get a better deal on a house if you shop in the winter? Some data suggest that you might.

National data from Trulia, a real estate website, show that asking prices for homes hit a peak in August, then head down and bottom out in December.

CoreLogic’s index of housing prices in St. Louis shows a similar pattern of rising in the warm months and sinking in the winter. The pattern held despite the general fall in housing prices from 2007 until last year.

Real estate sales have always been highly seasonal. In St. Louis County, twice as many houses sell in June as in January. Prices don’t swing nearly as much as sales numbers.

The seasonal price move is “several percentage points,” says Jed Kolko, chief economist at Trulia.

Several percentage points on the price of a home can be a lot of money. In St. Louis County, houses that sell in December and January go for 91.8 percent of the original asking price, compared with 95.1 percent for those sold in July, according to eight-year averages supplied by agent Shawn Kelsey of Keller Williams Realty.

If you’re looking to take advantage of that pattern, Kolko says, the time to buy is now. “This is a very good time to go looking.”

The downside is that winter shoppers have fewer homes to choose from.

Kolko says price swings are a matter of supply and demand. House hunters come out in early spring; sellers come to market a little later.

On Trulia’s website, searches by Missouri house-hunters are highest in March, followed by April, then July. In Illinois, which is dominated by Chicago, searches are highest in April.

So, lots of buyers and relatively few sellers push prices up in the spring. Then, as more homes come on the market, prices moderate. As cold weather comes, buyers disappear and prices slide.

Lower winter prices may, in part, reflect sellers surrendering on houses that proved hard to sell in summer and fall. “Days on market” – the length of time the average house has been for sale – tends to be highest in January, February and March in St. Louis.

Some Realtors doubt that prices move with the season at all. Bob Bax, broker-manager at Prudential Alliance in Ladue, says he’s noticed nothing of the sort in 25 years in the business.

“I’ve never heard of that,” he said.

He sets prices on homes by looking at comparable sales over the past six months, he says, not by the weather outside.

However, Kelsey thinks the pattern is real, and it shows up in median home price figures for St. Louis.

Sale prices in St. Louis tend to be highest in June and lowest in February. But the variation in price is so wide — $106,000 last February vs. $152,000 in June — that it suggests that different types of houses sell in different seasons. It may be that winter is the time to grab a house from a desperate buyer in distress, or one who’s simply tired of having shoppers traipse through the living room.

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