As the data on 2022 listings trickles in, we are recognizing a familiar pattern. What we refer to as the “spring market” (homes that are sold beginning in late January), is starting off with a bang. Home sales are again hitting new highs.
We talk about a new “watermark” each time spring rolls around - the sales that happen early set a precedent for later sales and ratchet up prices each year. Sometimes the jump from the year prior is 10%, and other times (like in 2021), the jump is 27%. It’s too early to know what the 2022 data will show but we are seeing a significant jump.
The question is…why?
What is driving this pattern? Why are buyers willing to edge up their offers and home sales reach new levels each year?
We recognize several drivers for the predictable pattern:
The buyer journey can be long, and most buyers that are getting into contract now started their journey 6 months ago - or more! After they were outbid and unsuccessful in their hunt, the predictable holiday slide begins and the number of options dwindle. With a dearth of listings, and several months of trial and error behind them, the home search gets more desperate. By the time January listings hit the market, the pent-up demand drives competition for limited resources, and thus the prices skyrocket.
Often, these buyers have announced to family and friends that they are on the house hunt! And as holiday gatherings bring buyers face-to-face with the very people who inquire into their unsuccessful search, buyers dig deep and find additional resources to bring them “over the hump” - social engineering dictates that humans will do almost anything to save face in front of our community. So, buyers get competitive. Although it’s hard to believe, many buyers make New Years resolutions to find a new home in 2022. They enter the market with a vim and vigor unseen in the rest of the year.
Last, in many communities school enrollment windows open up around February and last about 1.5 months. Many families with school-age children will strive to register in the school district of their choice with a local address, and this puts additional pressure on buyer demand.
Understanding the drivers behind home buyer behavior helps us guide both our buyers and our sellers as they navigate the best options for themselves.
Home buying is seasonal. As we march towards summer we’ll take a look-back at the spring 2022 season and provide insight into buyer psychology through the remainder of the year.