Everybody gets horny for the spring real estate market.
The sun comes out, flowers start blooming, sellers throw some bark dust in the yard and suddenly everyone decides this is the weekend they need to buy a house. Open houses are packed, buyers are circling the same listings, and sellers start feeling pretty damn confident.
September is different. September doesn’t get nearly as much hype, and that’s exactly why I like it.
Here in the Portland market, we’re entering fall with just under four months of inventory, which means buyers have something they haven’t exactly been drowning in for the last several years:
Options. And leverage.
Not unlimited leverage. We’re not talking about walking into a seller’s house, putting your muddy shoes on their coffee table and demanding they throw in the refrigerator, their Tesla and custody of the golden retriever.
But enough leverage that buyers should absolutely be paying attention.
First, What the Hell Does “Months of Inventory” Mean?
Real estate people love throwing around terms like “months of inventory” because apparently saying “there are more houses available than buyers are currently gobbling up” isn’t sophisticated enough.
The calculation is actually pretty simple.
You take the number of homes currently available for sale and divide it by the number of homes selling in roughly a month. The result gives you an estimate of how long it would take to sell through the current inventory if no additional homes came onto the market.
So if we have roughly four months of inventory, theoretically it would take about four months to sell through the available homes at the current sales pace.
Generally speaking, the higher that number gets, the more negotiating power starts shifting toward buyers.
And right now, Portland buyers have more negotiating room than they’ve had during those insane years when people were waiving inspections, offering $75,000 over asking and apparently tossing in their firstborn child just to make their offer more competitive.
Thank God we’re done with that shit.
September Creates a Very Interesting Seller
Here’s where September gets sneaky.
A seller putting their house on the market in April might be thinking, “We’ve got all summer. Let’s see what happens.”
A seller who is still on the market in September is having a very different conversation.
Maybe they’ve already reduced the price. Maybe they’ve had 37 showings and are tired of making their bed every morning. Maybe they’ve spent the last six weekends shoving the dog, the kids and the dirty laundry into the minivan every time somebody wants to see the house, and they’re over it!
More importantly, they can see the Portland winter coming. And anybody who’s lived here for more than five minutes knows what that means.
Soon it’ll be dark at approximately 2:17 in the afternoon, everything will be wet, your lawn will turn into a swamp and moving day will involve carrying a sofa through sideways rain while questioning every decision you’ve ever made.
Suddenly, getting the house sold now starts sounding pretty fucking good.
Motivated Sellers Create Opportunities
This doesn’t mean every seller is desperate. Some aren’t. Some have plenty of time, plenty of equity and absolutely no reason to accept a crappy offer.
But September tends to create more situations where sellers are willing to have a conversation.
That could mean a price reduction.
It could mean closing-cost credits.
It could mean money toward repairs.
It could mean a credit to help buy down your mortgage rate.
It could mean negotiating appliances, possession dates or other terms that would have been laughed out of the room a few years ago.
And sometimes the best deal isn’t getting another $10,000 knocked off the price.
For a financed buyer, getting a seller credit that helps reduce your interest rate or covers thousands of dollars in closing costs can potentially be more useful than simply beating the seller over the head for a lower purchase price.
This is why you don’t just write an offer. You look at the seller’s situation and figure out where the leverage actually is.
You’re Also Competing With Fewer Buyers
This is the other side of the equation.
September rolls around and people get busy.
School starts. Sports start. Vacations are over. Work gets serious again. People start thinking about Halloween, Thanksgiving and Christmas, and a bunch of buyers mentally decide they’ll “start looking again in the spring.”
Perfect, let them!
Because when fewer buyers are running around chasing houses, the buyers who stay in the market can have a completely different experience. Instead of finding a house Saturday morning and being told offers are due Sunday at 5:00, you might actually have time to see the house twice.
You can review disclosures. You can think and you can negotiate. You know… all the crazy shit people should probably be allowed to do before spending $600,000.
And You Could Be Home for the Holidays
There’s also a practical reason September is a great time to buy. If you get under contract this month, there’s a very good chance you’re moved in and settled before Thanksgiving or Christmas.
That means Tanksgiving happens in your new kitchen and/or your Christmas tree goes up in your new living room.
Your relatives can come over, drink all your booze, criticize your decorating choices and overstay their welcome in your new house. That’s the American Dream right there!
And depending on when you close and how your loan is structured, you may not make your first mortgage payment until January.
That’s because mortgage interest is generally paid in arrears. For example, if you close in November, you’ll typically prepay the remaining November interest at closing, December’s interest accrues during December, and your first regular mortgage payment may not be due until January 1.
That’s not “free housing.” Trust me, the bank hasn’t suddenly developed a charitable side. But from a cash-flow standpoint, having that gap between closing and your first monthly payment can be pretty damn convenient during the most expensive time of the year.
Stop Waiting for the “Perfect” Market
I hear buyers say this all the time:
“I’m waiting for rates to come down.”
Okay. But what happens when rates come down enough that thousands of other buyers decide they’ve been waiting long enough too?
More buyers!
Which means more competition. More multiple offers. Less negotiating power. And potentially higher prices due to an increase in competition.
I’m not saying you should buy a house simply because it’s September. Buying has to make sense financially and personally. But don’t make the mistake of thinking the best buying opportunity automatically happens when mortgage rates are at their lowest.
Sometimes the better opportunity is when competition is lower and sellers are more negotiable.
You can potentially negotiate the house today and refinance the loan later if rates improve. You can’t refinance the purchase price you overpaid because 14 other buyers showed up when everybody decided the market was “good” again.
Kevin’s Take
September might quietly be one of my favorite months for buyers in Portland.
We’ve got just under four months of inventory, buyers have choices, and we’re heading into the part of the year when sellers start looking at the calendar and realizing they really don’t want to be moving a sectional sofa through freezing rain in December.
That’s leverage.
The goal isn’t to screw the seller. A good deal is one where everybody gets what they need. But if you’re a buyer right now, you should absolutely be asking for things.
A fair price, closing costs, repairs, rate buydowns, etc. Whatever makes the most sense for your situation.
Because while half the buyer pool is sitting around waiting for some magical flashing sign that says NOW IS THE PERFECT TIME TO BUY, there are deals being made right now.
And I’d much rather negotiate with a motivated seller in September than fight six other buyers for the same damn house next spring!
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