“March Madness” in the real estate market
Continuing the conversation….heading into week three of “March Madness” in the real estate market. A term I borrowed from college basketball’s big annual championship tournament (think bracketology) to reference the heightened competition for homes that usually plays out this time of year with surprising intensity.
This is my 36th year as part of a lifelong sociological field study (with a double minor in cultural anthropology and behavioral psychology). It’s designed to gather as much experiential data as possible from real life situations to test the logic people employ when they’re buying/selling their homes. The occasional insights I glean read like chapters in a book on freakonomics, as they often reveal hidden truths that are sitting in plain sight.
Take selling a house… It has always been a mystery why so many people think summer is the best time to list their home. Why? Where did that idea come from? What makes so many people believe it? And is it really true? Does the data actually support the belief? After thirty plus years of polling my clients, here are the most common reasons they cite for listing in the summer.
Blue Sky Thinking: The specifics of this are a little fuzzy but it goes something like…Summer is the best time to sell because the weather is better, the flowers are out, the grass is greener and no one likes to look at houses when it’s cold or raining. When the sun is shining, houses look better so they sell for more.
Taxing Proposition: This idea assumes that most of daily life revolves around paying taxes. People don’t buy homes until well after the April 15th tax deadline is over. Once their taxes are done and their minds are freed up, they’re ready to buy. Income-wise they know where they stand and there’s an extra appreciation for the tax benefits that come with homeownership.
Market Getting Schooled: This one assumes that people wait until summer to buy because that’s when kids are out of school and they have more time to look at houses. As added incentive, since most parents want to make sure their kids get settled into their new home before the school year begins there is extra pressure to close on something before September rolls around.
Perception is Reality. This one assumes that the best time to sell a house is the summer because historically, more houses transact in June, July and August than at any other time of the year. Since so many people think that summer is the best time to sell, then that must make it so.
Next Week: What’s wrong with this picture?
