Even the rookie homebuyer knows spring and fall are the busiest times of the year for residential sales, but with brokerages pulling in record sales in traditionally slow months like January and July, those seasonal highs and lows may be out of sync.
“One thing that’s changed so much in the past couple of years is that the traditional selling cycles of busy in the spring and slow in the summer have really gone by the wayside,” says Jim Gricar, executive vice president and managing director of sales for Brown Harris Stevens. He discussed the shift in real estate cycles, caused by interest rates and inventory, in a recent Real Deal Webcast.
“What we’ve seen instead is what I call mini-cycles. Prices and activity spiking and then hitting a bit of a valley multiple times through the year, sometimes multiple times throughout the quarter,” Gricar says.
Other brokers also say they’re seeing the seasonal sales phenomenon fade.
“I can’t tell you why, but seasonality seems to have gone away,” says Adrienne Albert, president of the Marketing Directors. “The big months didn’t get less big, but the slow months have gotten less slow.”
All of this didn’t happen overnight, says Albert, but has instead been a more gradual process happening over the last four to five years. According to Tara Hogan, the Marketing Directors’ vice president for research, in 2003, winter and summer together accounted for around 25 percent of the year’s total sales. By 2006, she explains, those differences in seasons had flattened, with each season accounting for approximately 25 percent of the total annual sales.
Still, brokers agree that certain factors — most often, cold weather and holidays — will always slow down real estate activity. In March, the National Association of Realtors said sales volume in February was particularly low because of cold weather.
The period between Thanksgiving and New Year’s also sees less activity. But in recent years, according to Bill Ross, Halstead’s executive director of sales in Brooklyn, that downtime has made January the best month of the year. “Six to eight weeks of pent-up sales creates a lot of demand,” he says.
While brokers have long counted on a seasonal pattern, statistics show it hasn’t existed — at least in recent years. An examination of quarterly sales data from Miller Samuel shows that the past seven years fail to exhibit seasonal increases in both the second and fourth quarters. In fact, in 2000, 2001 and 2006, there was a decrease in the number of sales in the second quarter when compared to the previous quarter. In 2002, 2003, 2004 and 2005, there was a decrease in the number of sales in the fourth quarter when compared to the third.
Albert says the spring and fall sales peaks were more pronounced years ago when many families timed their moves to correspond with the school calendar. In Manhattan, the school year is less of a factor considering more than half of heads of households in the borough are single. Albert also points out that urban, wealthy buyers send their kids to private schools, so a mid-school year move wouldn’t necessarily require changing schools.
In Brooklyn, brokers echo Albert’s statements. Ross says Halstead has also seen less of a slowdown in the usually sleepy months of November and December. This past December, he points out, attendance at his open houses was 25 to 35 percent higher than in previous years.
One possible explanation for a busier December, Ross speculates, is that Wall Streeters often find out in December the amount of their January bonuses. Once they know what they can afford to buy, they start looking at properties.
That explains increased activity over the holidays, but what about the rest of the year? “There’s an argument to be made that during the housing boom, the proverbial two-hump camel [the ‘humps’ being sales spikes in spring and fall] started fading,” says Jonathan Miller, president of appraisal firm Miller Samuel. “Swings in interest and mortgage rates caused the high season to extend and we had some record summers.”
Record off-seasons have forced marketers to stretch their advertising budgets beyond spring and fall. “You’re thinking more about all 12 months instead of just March and September,” says Albert.
And just because buyers aren’t physically attending certain open houses doesn’t mean they aren’t actively searching for a home. With the Internet, says Albert, “you can reach buyers anytime, anywhere.”