Does Weather Affect Buyers?
Does weather really effect buyers? Read more to find out exactly how the change of the seasons can effect a buyers willingness to pull out their wallet.
The short answer is yes; weather affects buyers. In an interesting study done by The National Bureau of Economic Research. Four researchers scoured millions of automobile and home sales and analyzed how the weather affected buyers. And, if your guess would be that more people are impulsive in the summertime, then come on down, because you’re right.
Low Frequency Decisions Vs High Frequency Decisions
One interesting behavioral element talked about a lot in decison making is that of high and low frequency decisions. What are these? Simply put they are what they sound like, low frequency are decisions we do not make much like "do I go through with the marriage?" Or "do I buy this car?" and so on. High frequency is the flip side and are questions we ask on the daily like "should I go home early?" You can likely see the difference between the weight these types of question pose.
These fancy-pants term researchers use to describe the mistakes that people make when projecting what they will need in the future is called “projection bias.” We humans sometimes believe that things that are valuable to us now will be equally valuable to us in the future. That, however, isn’t always true. Think about all of those times that you spent money on something you thought was “cool” to only think it was super lame the next year. Projection bias exists across all industries including the real estate industry and it drives sales and sale prices.
Projection Bias - A Potential Money Waster
One other interesting topic to bring up is the idea of the "id" in our unconscious. Wait don't freak out yet, we promise this will make sense. Lets just go down a quick little rabbit hole, trust us it will be fun.
The Id is one out of three components, the others we won't worry about now but are called the ego and superego. Out of the three the Id is what scientists call the primal element of personality. Its the devil on your shoulder that tells you man I really want to drink a few more beers or that new computer is looking good, yeah I can afford it.
The Id wants instant satisfaction and constant stimulation and partying. According to simplepsychology.org, "The id is a part of the unconscious that contains all the urges and impulses, including what is called the libido, a kind of generalized sexual energy that is used for everything from survival instincts to appreciation of art." Also other then being the partyer, the Id is also stubborn and may be the reason you yell at yourself for not getting that fancy new watch a few hours later.
Also its important to note Sigmund Freud came up with this concept and while not many psychologists take him seriously anymore it was still a important development.
Why does this matter? Well it ties into projection bias since the Id is the big contributor to why we may by things that look awesome, to only become boring days or hours later. Just scale this up a bit and we can be looking at homes in the same way.
Due to projection bias, people will often pay more for homes with a swimming pool and/or central air in the summer months than in the cooler months. Researchers discovered through these crazy, amazing formulas and data sets that a swimming pool adds more value to a house that goes under contract in the summertime than it adds to the same house that goes under contract in the wintertime. According to the report:
So Does Weather Effect Buyers?
Yes, combined with other more internal influences. The idea of the immediate utility of a pool may be worth more to buyers given the season and they may be more open with their collective wallets because of that. But, very simply, buyers are willing to pay more for the same property if its hot should that property have a pool and central air.
The logical follow-up question for anyone in the Real Estate industry is then: How can we leverage this natural behavioral impulse given how we list or even show our properties?
So there you have it, weather combined with more complex psychological influences does affect buyers. When the Id sees a pool attached to a nice home on a hot 90 degree day, it will jump on the chance to get it. But if we zoom back out to a easy to understand level, if you see a pool attached on a cold winter day vs a nice heating system what will you go for? A pool then is useless, but a great heater or fireplace? That's great for the cold season.
If you keep on eye on the seasons and forecast you can swing a few more referrals then others who take it as it comes. Make sure you sign up for NuOp as well to add another great tool to your b2b referral game.