Most businesses are cyclical to some degree; very few industries are unnafected by the various pages on a calendar.
We know that the summer is typically “slow” in real estate, or at least that most people deem it that way.
So what is the reason for the September boom?
Before I go ahead and contradict myself, let me clear something up first.
A few weeks ago, I posted a story about my client who got his hands on a very sought-after unit at 270 Wellington Street. The moral of that story was “timing” and I professed that the summer is only slow if you allow it to be.
But this is from my perspective, and not from the perspective of the market as a whole. I live by the motto “24/7,” and just because “summer is slow” doesn’t mean I’m going to put all of my clients’ needs on hold. We got that unit at 270 Wellington Street because although there were fewer listings and fewer quality listings, we still scoured the city every day.
I think that because we live in Canada and have such long winters, we play harder in the summer. This means that things like putting a house on the market can wait until the delightful summer-weather is gone.
Every year, the week after labor day plays host to a whole slew of new listings in the real estate market. While there are a multitude of different reasons for this, many of them can be traced back to the summer.
Take these four scenarios:
1) Bob and Mary have two boys aged six and eight. They live in 2-bedroom, semi-detached house on Glenvale Blvd that served as their “entry level house” a few years back. The boys currently share a room with bunk-beds, and spent the summer away at camp in July & August. Bob and Mary took this opportunity to take a cruise in the Mediterranean and cast aside their wordly troubles for ten unbelievable days. On August 29th, they pick up their children from camp, and return home to get them ready for the school year. Summer brings about changes, especially those in the lives of young boys, and the parents see that the boys are too old to still be sharing a bedroom. The kids bicker and fight, and the root cause is the fact that they live on top of one-another and need some space. Bob & Mary decide to put their house on the market, and find a 3-bedroom or perhaps a 4-bedroom house.
2) Evelyn and John have been married for twelve years, and like any other marrige, there have been ups and downs. Their kids are in high-school and thus self-sufficient, and Evelyn & John have both been able to keep their own schedules and have been leading somewhat different lives. They are both career driven, and with all their focus on their own goals they have let whatever is left of their “marriage” fall by the wayside. After a long summer where they barely saw their teenage children and where they almost zero time together (and the time together was arguing, as usual) September rolls around and they finally decide to get divorced; something that was just “a long time coming.” Their family house in Lawrence Park goes on the market, and Evelyn begins searching for a smaller house in the Avenue/Lawrence area while John looks for a condo downtown close to his office.
3) Bradley is a 29-year-old investment banker who lives in a very large, very nice 1-bedroom condo at 20 Blue Jays Way. This is the second condo he has owned; he sold his first condo two years ago when he got a big promotion at Merrill Lynch and moved into the bigger space at “Element” on Blue Jays Way. Bradley worked his tail off all summer and was part of several large acquisitions in the Spring. He got the attention of some of the big boys down in New York, and parlayed his hard work into a job offer from Goldman Sachs on Wall Street. The money was too good to turn down, and he took the job. He then put his Toronto condo on the market, and made the trek down to live South of the border.
4) Candace is a 52-year-old single mother of three girls, whom she raised all by herself. Her youngest daughter just finished high school this past Spring and will be attending the University of Western Ontario in September. Her eldest daughter is two years out of university and just blessed her mother with the great news that she is engaged to be married, while her middle daughter is finishing up her schooling in 4th year at Dalhousie University. After the seemingly endless effort to get her youngest daughter situated at Western, Candace realizes how much empty space remains in her four-bedroom house that used to be inhabited by she and her three daughters. The emptiness is a constant reminder of the void her children left, and she puts her house on the market and searches for a spacious 2-bedroom condominium that has second bedroom for her youngest daughter during the summer months when she is (hopefully!) living back in Toronto.
These are all examples of why people need to sell their properties, but they are specific to September.
And I know you can all respond, “Dave, these examples could take place any time of the year!” That may be true, but for some reason these things usually transpire in the month of September.
Obviously, the examples that hinder on the school year would only happen in September, but even a couple getting divorced might also happen more often than not after a long, drawn out summer.
The real estate market is vibrant all year long, but it has two identifable “busy markets” in the Spring & Fall.
Now, remember that the Spring market has essentially two parts: Feb-March before Easter and Spring Break, and April-May-June. But because the Spring market is so much longer and follows the dead of winter in January, there is no “boom.”
In September, we feel that “boom”! You know how the first day of school always had that certain feel to it? It’s the same way with real estate. You just know that the market is going to explode the week after Labor Day. Summer is over, school is back and so are the kids and their respective parents from cottages and vacations, and it’s time to get down to business.
September means business, and the business of putting one’s house on the market happens more in September than in any other month. Sure, there are exceptions now and again, but for the most part, you can be guaranteed that you’ll see more “FOR SALE” signs on lawns when the leaves begin to change color.
Condominiums are a different story alltogether, and not just for the obvious reason that there are no lawns to hammer signs into…