School Interrupts Home Buying

September is the beginning of tougher months for REALTORS® because fewer homes get closed during the month. The beginning of a school year focuses the minds of parents on the right clothes and supplies for their kids. Most families with school-aged children also prefer not to disrupt the school year by moving to another district, so those who would have moved would have already done so during the summer months.

The raw home sales data bears out this trend. The closing of sales are highest in the summer months of June, July, and August. From September onward, sales are about 20% lower. By December, it is lower by 25% compared to summer months. Sales do not pick up until March. Then comes those peak summer months again.

(Please keep in mind that the home sales data most closely followed and reported in the media is not the raw count, but NAR’s seasonally adjusted annualized rate on home sales. As with any economic data, one does not want to misinterpret underlying changes in economic trends by following only raw data. For example, a massive job disappearance at an amusement park after the summer does not signal a beginning of an economic depression. It is a normal seasonal phenomenon.)

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In addition, a larger percentage of single people and households without school-aged kids move during the school calendar year and they tend to buy a smaller-sized, lower-priced home. Expect, therefore, a lower recorded median price of homes in autumn and winter months compared to summer. It is not necessarily a decline in home price, rather a reflection of smaller-sized homes getting more action during autumn and winter months. A proper home price comparison is to track how the median price has changed from the same month one year ago.

All real estate, however, is local and some local markets will not follow the above national seasonal trend. In Palm Springs, for instance, sales are at their strongest in autumn and winter.

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Lawrence Yun, PhD., Chief Economist and Senior Vice President

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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Comments
  1. Interestingly, in my experience, buyers during the autumn and winter months tend to be more motivated. In other words, something has them out looking at homes during these often inclimate months. Typically, a job change/relocation or marital change or something similarly life-changing has created a need to make a housing change immediately (not just a desire for a change).

    This more motivated buyer is met, during these months, with a much smaller inventory of homes to choose from. Hence, the nicer homes in our market tend to get better prices during these months than in the summer months when they face stiffer competition from more homes on the market.