The conventional wisdom is that the past month of nonstop rain should have put a damper on real estate sales, but, in fact, the opposite has happened.
If you walked outside at any point this spring in much of the U.S., you probably got drenched. From New England to Texas to Montana, the rain has barely stopped.
The conventional wisdom is that this should have put a damper on real estate sales. Lending Tree economist Tendayi Kapfidze, for example, told Inman that there is indeed a “certain seasonality” to sales. And while he hasn’t seen a study linking rain to a slow real estate market, the idea “just kind of makes sense” and he’d expect precipitation to drive away at least the casual real estate browsers.
“All kinds of activities are curtailed by the rain,” he added
Orla Roche, a Sotheby’s agent in Boston, had a similar take, saying that listings don’t photograph as well in gloomy weather and “a home always shows better when the sun is shining.”
“This is why most homes sell in the spring/summer,” she continued. “Everything’s in bloom, things are greener, fresher and people’s attitudes are more positive.”
But here’s the thing: Real estate professionals across multiple cities who spoke to Inman for this story said that in fact the rain didn’t actually slow things down at all. Instead, listings in many places have been moving as fast as the water has been falling.
“If you’d asked me before this spring, I’d have said that it does slow down business” John Crowe, an agent at Juice Homes and a director at the Austin Board of Realtors (ABOR), said of rain. “But I think this year’s exceptional.”
Crowe told Inman that April was “incredible” in the Texas capital.
The data bears that out. According to ABOR’s April sales report, the number of homes sold last month “skyrocketed” 15 percent year-over-year. Dollar volume in the region also increased by more than 14 percent, and the median home price rose by 1.6 percent.
This is despite a serious amount of rain falling in Austin. Cory Van Pelt, a National Weather Service meteorologist in the city, told Inman that since March 1, the area has received 13.1 inches of rain — making this year Austin’s 18th rainiest spring on record.
“Definitely the Austin area has been above normal,” he explained.
Van Pelt said the weather is likely the result of normal spring storms combined with an ongoing El Niño, a phenomenon in which warm water in the Pacific changes the wind patterns that carry moisture to the Americas. In this case, El Niño has likely helped fuel extra wet conditions across entire regions.
“As far as the southern United States, it’s been consistently stormy and rainy,” Van Pelt added.
National Weather Service data paints an even broader picture, showing that pockets of the Midwest, South, and New England had in some cases hundreds of percent more rain than normal in April.
Certain major population centers in particular saw higher-than-normal amounts of precipitation in April. Some parts of Boston, for example, saw as much as double their normal amount of rainfall. The core of New York City ultimately saw mostly typical rainfall, but some surrounding communities saw as much as 150 percent of their normal precipitation in April.
But as was the case in Austin, agents in New York City and Boston said they too have experienced an especially active spring.
“We have been busy so far this spring despite the rain,” Patrick Smith, an agent at Corcoran, told Inman.
“I used to think that a rainy Sunday meant a slow Sunday for open houses,” Allison Chiaramonte, a New York-based agent at Warburg Realty, also said. “This spring, however, we have had strong open house turnout even in this miserable weather if the listing is attractive and well-priced.”
In Boston, Roche, the Sotheby’s agent, said the “city certainly doesn’t show signs of slowing down, or lack of buyers.” Data from the Greater Boston Real Estate Board, reviewed by Inman, further shows that single family homes sold in April were up more than 10 percent year-over-year.
Median sales price in the Boston area was up 1.2 percent.
So why exactly is this happening? If agents across multiple cities are seeing both a lot of rain and a lot of business, what gives?
In New York, a confluence of conditions appears to have kept sales moving at a strong clip. Chiaramonte, for one, said that the city currently has a buyer’s market, and “no one wants to miss out on the opportunity” — meaning people are willing to get out and purchase property whatever the weather is.
Both she and others who spoke with Inman also pointed to the city’s impending mansion tax, which will hit buyers of any property over $1 million. The tax goes into effect in July, and some buyers are trying to beat that deadline.
Elizabeth Stribling — president of Stribling and Associates, which was recently acquired by Compass — also said that after years of rapid price appreciation, sellers are currently starting to ask for more realistic sums. And that is apparently giving buyers greater motivation to finally take the plunge.
“I’ve seen more deals go through in a more frenetic pace in the last two and half to three months than I saw last year at this time,” Stribling added.
Smith, who works in Manhattan and Long Island City, noted a similar phenomenon, saying that after several difficult quarters “we are findings sellers who are more willing to negotiate.” He also said that New York is “a year-round market so much less effected by weather in general.”
Down in Austin, Crowe attributed booming business to low inventory, which increases competition and forces buyers to hit the pavement regardless of the weather.
“I think people are willing to brave the elements a little bit more as a result of not having a huge selection of homes to choose from,” he explained.
The data from Boston suggests something similar might be happening there as well. Though sales and prices of single family homes were up in April, inventory was actually down 1.8 percent year-over-year. Perhaps even more tellingly, there was also only 2.9 months of supply — a drop of 9.4 percent compared to April of 2018.
The idea here is that constrained supply in the face of ongoing demand means sales are remaining strong.
None of this is to say that sales have been robust everywhere. Skylar Olsen, Zillow’s director of economic research, told Inman in an email that some regions have indeed seen softer sales. However, that shift doesn’t appear to be weather related, and it will likely be short-lived.
“What we’re experiencing is a reaction to the challenge to affordability posed by prices out pacing incomes for a sustained period of time,” she explained. “It’s a price correction, a market cycle.”
Washington, D.C., is among the areas that appear to have experienced a weaker market this spring. Kymber Menkiti, president-elect of the D.C. Association of Realtors, told Inman that in her area both inventory and days on market have gone up this spring compared to 2018.
“The spring was a little bit slower,” she added.
But Menkiti attributed that trend to broader market forces, not the weather — which according to the National Weather Service actually saw slightly below normal rainfall in April (though some surrounding communities did see more precipitation).
“I think everyone’s holding their breath a little bit,” she added. “We’re seeing a little bit more buyer uncertainty.”
In the end, then, the take away may simply be that at least at this point in time the market — whatever its health in a given area — trumps the weather. Kapfidze, the Lending Tree economist, said that he’d ultimately expect the affects of the weather to be marginal and that “high intent buyers would still be out there.”
Javier Vivas, director of economic research at realtor.com parent company Move Inc., further explained to Inman that he is familiar with the idea that the weather can impact real estate sales. But at least in today’s economy, that isn’t what’s happening.
“In a balanced, normal market, any change in confidence or how people feel could deter foot traffic,” he explained. “But some of the smaller affects [of the weather] are completely masked.”
Vivas pointed to strong buyer confidence and a sense that people are “feeling good about their jobs” as factors that led to a strong spring in many cities.
But perhaps most importantly, interest rates have dipped below the peaks they hit several months ago and are not expected to spike again this year. Vivas said this matters because “you’ve got a market that’s really suffering from affordability,” so anything that makes real estate cheaper will motivate buyers.
“If there’s any weather affect,” Vivas added, “it’s simply being erased by the lower mortgage rates.”