Does Weather Affect the Buying Temperature?
David Bates / March 27, 2012-12:09 pm
Last winter was the ‘Blizzard of 78” every week. But this winter has been so mild, you might’ve tried to get a tan. Fortunately, the home sale numbers have improved almost as much as the weather. So, is weather affecting the current home buying temperature?
To determine whether an increase in snowfall leads to a decrease in home sales (and vice-versa), I found a website that listed the area snowfall amounts by season for the last 11 years (http://www.erh.noaa.gov/box/climate/bossnw.shtml). I presumed that if inclement weather forced motivated buyers to delay their home search until spring, home sale numbers for the snowy months (Q1 – January, February, March) would be a little lighter, while home sales numbers for spring months (Q2 = April, May, June) would be alittle heavier. On the other hand, during mild winters, when consumers could peruse clean streets and clear walkways, the exact opposite would happen: home sales would look heavy in the snowy months and spring sales would be lighter. Such changes in sales by quarter would be the result of whether or not there was pent up demand from the home buyers who had delayed their home search.
I gathered the home sales numbers for Q1 and Q2 for the last 11 years and began to compare them to the snowfall amounts. In the last 11 years, Q1 sales accounted for somewhere around 34% – 41% of the first half of the year’s home sales, with the median being around 38%. According to the website I found, snowfall during those years ranged from 15.1 inches to 86.1 inches per winter. If the premise was correct, the highest Q1 sales percentages would be associated with the lowest snowfall amounts and the lowest Q1 sales percentages would be associated with the highest snowfall amounts.
I immediately saw that the two highest Q1 sales percentages had occurred during the two mildest winters (15 and 17 inches of snowfall). However, that was where the correlation seemingly ended. The worst winters (86 and 81 inches) failed to be among even the three worst home sale numbers for Q1. On the other hand, the worst home sale numbers for Q1 belonged to some of the more mild winters (35 and 37 inches of snowfall). So I concluded, you can’t project real estate sales by asking the simple question, “How’s the weather?”