The Super Bowl is more than just a game, of course. It’s American capitalism at its best, when snack-food makers hike production, magazines tout Super Bowl recipes (heavy on the Cajun seasoning) and Madison Avenue unveils its sexiest new commercials.
For the housing industry, it is the weekend that kicks off of the traditional spring rush.
“Traditional” is the operative word here because it is remarkable how little the home-buying season varies from year to year or region to region, despite outside influences.
“The weekend after the Super Bowl, people start home-hopping,” says Tracy Cross, president of Tracy Cross & Associates, a Schaumburg-based residential marketing research firm that tracks new-home buying. “The Christmas bills are paid and the weather is breaking.”
In the Chicago metropolitan area, new-home sales are slowest in December (4.50 percent of the year’s total) and January (4.54 percent).
The speedy shoppers punt sales up to 8.58 percent in February. Sales peak in March at 15.10 percent, then decline for the rest of the year. (The industry defines “sale” as the contract-signing, not the closing, which typically occurs three to six months later, says Cross.)
“These numbers play out across the Midwest, and somewhat nationally,” says Cross. “This doesn’t just apply to the colder climates; March is the biggest month in Atlanta too.”
Some buyers take advantage of the slow winter months to buy a home. In some cases, builders offer special incentives to keep sales moving.
Amy and Kristian Alvey said they started out looking for a house over the Thanksgiving weekend and bought quickly at Lakewood Falls Club in Romeoville. They moved into their new three-bedroom house the weekend before Christmas.
“We had lived in an apartment for four years, and I told my husband that this was it. We needed a home for our son, Jeff, 12, and daughter, Cassie, 10,” said Amy Alvey.
She said that by making their purchase at yearend, they got appliances thrown in for free, as an incentive from Lakewood Homes. Additionally, they decided it was time to buy because mortgage rates remained low.
“We got help from both our families in picking out the house and family members helped us celebrate the holidays in our new home,” Amy Alvey said.
Although weather does affect home-shopping, the biggest seasonal influence by far is the school schedule, says Cross.
“Even though not every buyer has children in school, they’re part of a chain affected by the school year,” he says. “New [college] graduates typically sign leases in June. That starts the cycle; the person who rented that apartment buys a condo, and so on up the chain.”
By signing on the dotted line in the spring, families with school-aged children can move during the summer, before the next school year begins.
No matter that home-buyer demographics have changed over the years, says Richard J. Brown, chief executive officer of Cambridge Homes Inc. in Libertyville.
Families now are fewer
“When I started building homes in the ’60s, 100 percent of the buyers were families with young children,” he says. “Now, the young families account for about 35 percent.
“The others are singles, couples (married or not married) who don’t plan to have kids, and divorced men or women.”
Such demographic factors affect the way people shop.
“First-time buyers usually buy within three months,” says Cross. “Move-up buyers take three to six months, often looking at existing homes, too, even if they buy new. The move-down buyer takes the longest, often 18 months to two years.”
The move-down crowd includes 55-and-older folks who are selling their family homes.
“They are the most careful shoppers,” says Brown. “They don’t HAVE to move. They come in six to 10 times before they buy, compared to the young families, who may come three times.”
While move-up and move-down buyers are amazingly consistent in their buying habits, the wild cards are the transferees, who must buy quickly, no matter what the season.
“But they account for a very small part of the market — only about 5 percent,” says Steve Baird, president and chief executive officer of Baird & Warner in Chicago.
“It seems like a greater number because they are high-profile. We all heard about it, for example, when Boeing moved a group of people here. But that was only a few hundred buyers — a small percentage of the Chicago-area market.”
Seesawing interest rates don’t affect the home-buying seasons much from year to year, says Cross.
“What does affect the numbers temporarily are `occurrences’ — extreme weather, rapid falls in the stock market or interest rates or tragedies such as Sept. 11,” he says.
Although sales offices are quieter in December and January, the builders hardly sit on the bench during this slower period.
“We reduce advertising a little [in the winter] but don’t reduce sales staff and don’t stop construction,” says Brown.
Better focus among buyers
Although fewer buyers walk through his doors during the winter, he says winter buyers are more intent.
“They are serious shoppers, while summer shoppers include some people who come to see the decorating in the models,” he says.
Baird says rising unemployment affects the Chicago real estate market less than other areas because of its diversified job market.
Although the law of supply and demand means existing home prices are a little lower in the winter, says Baird, he recommends sellers list their homes not later than February.
“Then they’ll be in the market and ready when the spring rush starts,” he says.
Just because people don’t visit model homes en masse until spring doesn’t mean they aren’t shopping from the comfort of their homes during the winter, says Alan Alper, spokesperson for Gomez Inc. in Waltham, Mass., an Internet research firm.
“Although a minuscule number of people buy homes online, it is fair to say that the Internet influences a majority of home purchases, from neighborhood research and listings perusals to brokerage selection and offer-making,” he says.
Some builders, including Neumann Homes in Warrenville, try to make home-buying more of a year-round sport by stepping up advertising and incentives that lure buyers from their armchairs.
“Especially during the holiday season, we’re encouraging people to come out and look,” says Jean Neumann, senior vice president of sales and marketing.
While she concedes that homes have less curb appeal when covered with snow, she says good salespeople can help buyers visualize a home on a sunny, summer day.
For those willing to venture out on blustery days, Neumann says the company staff tries to create a cozy atmosphere that’s more relaxed than during the spring stampede.
“We’ll have the fireplace going and hot chocolate ready,” she says.
– – –
The seasons of home buying
Some buyers take advantage of builder incentives to obtain bargains during the slow season.
DECEMBER AND JANUARY
The slowest months for buying are December and January, as home seekers focus on the holidays.
FEBRUARY
In February, more than 8 percent of the year’s total are sold.
MARCH
March is the biggest month for buying a home, when more than 15 percent of new homes are sold.
