Question to all -- Do REOs tend to leave properties up during this time, or do they also pull down and relist? I would assume they leave them up...
If you buy in December or January you'll have less competition from other buyers. The sellers who leave their homes on the market over the holidays are motivated and more likely to deal. You'll also buy before the demand goes up for homes in the spring. If your ready to buy start looking, rates are great and inventory levels are high. I don't have a number for you, every year is different and every market is different.
You need to check with your locaL REALTOR on the true statistics of the housing market for your area during the winter. Unfortunately, there is a lot of 'hearsay' in real estate and news media tend to like to dramatize any situation whehter they are justified or not.
I am a math major with a master in statistics and I can tell you straight that there are a lot of ways to play with numbers. Check with somebody who can actually explain the number for you.
In my area (Marin), housing price does not drop just because it is winter.. We will sell sellers pull the properties out of the market either temporary or complete witthdraw due to the season.. Less demand means better sales. I am sure you can deduct the result on the housing price.