August 29, 2018
Episode 2: Back to School
Kids are back in school and the real estate market has shifted. This episode, we discuss what that means for your business, and hear from industry experts Michael McAllister, Eden Elder, and Joe Sinnona.
Back to school season is absolutely wonderful for realtor moms. So many new parents to meet. Think future clients, right? New teachers, new friends.
ABOUT THIS EPISODE
On this episode, we explore the back to school ritual, and what that means for real estate businesses around the country. Whether it’s distracted buyers, apathetic sellers, or a whole new school full of parents and teachers to network with, we take a look at the annual tradition from every angle.
Hear from industry experts Michael McAllister, Eden Elder, and Joe Sinnona as they share their insights about what to expect as summer melts into fall. They also provide some great tips on how to network and continue to be a helping hand as parents grapple with changing routines at home.
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JON: All across the country right now and in the past few weeks, kids are packing backpacks and going back to school, their glorious summer vacations having finally drawn to a close, and their parents are rejoicing, breathing a huge sigh of relief, and adjusting to new routines. Hello and welcome to Shop Talk: The Real Estate Show. I'm Jon Forisha. This week we explore how this great migration of children affects real estate and how that knowledge can help your business.
JON: To properly address what going back to school does to your local housing market, let's first look at a typical real estate cycle. Real estate is always cyclical, but sales are typically higher in the spring through the fall, and it's no mystery why. The weather is warming up, yards don't have those weird bare spots anymore, and the flowers are blooming. Not to mention palling around town looking at houses with your friendly real estate agent sounds a lot better when it's not an icepocalypse everywhere you go. In 2015, an estimated 60 percent of all houses sold had been sold between the months of May and August. Here's Eden Elder, broker with Equity Colorado real estate, to say more:
EDEN: So I think it's widely known that both June and July are really good months for real estate, right? Because most families want to want to have moved by then and get settled before school starts, but the summer ones are also very busy. People are on vacation, they're playing sports, they have busy social calendars. And to me, you know, when the temperatures cool down and people fall back into a routine, there's more time to relax and think about buying or selling. And I think the bidding wars are most likely over by then, right? And the pressure to find a house before a certain date is gone. So I think it's a very comfortable time for people to buy or sell and just not so stressful. So it's a really good time, I think, for realtors to do business.
JON: A major reason the spring is the peak of most real estate markets is school. Parents looking to move with school aged kids are going to prioritize being close to a good school. And they started looking in the spring so their kids can actually go to that good school a few months after they move in. Michael McAllister, founder and CEO of The CE Shop, had this to say:
MICHAEL: The real estate industry has always been impacted by back to school season. Many of the purchasers of homes are families and kind of all things come to a screeching halt either at the end of school or the beginning of school, and everything from haircuts to buying new sneakers to, you name it. So you do see some fluctuations in there, and typically what I'd recommend for most real estate professionals is just to prepare for it because you're just not going to have the attention of your consumer. So somebody whose home you're trying to list or a buyer you're trying to help, they're going to want to get whatever they're working on done in advance of going back to school. And certainly during the time when kids are out of school, you know, families don't like to move their kids mid school year. So that's why the summer season is always so busy.
JON: Having strong schools and an overall strong school district can increase home prices by as much as 10 percent over neighboring districts. Even for home buyers without kids, purchasing a house in a good school district is a simple choice. Good schools don't exist on an island, and if the schools are good, it stands to reason the rest of the neighborhood's not so bad either. In fact, a recent Trulia survey showed that 19 percent of Americans said that their dream home is located in a great school district. These homes tend to be more expensive and have higher property taxes than the average home, but they also have great resale value.
JON: In pricey metros like New York City, it's extremely common for city dwelling families to eventually make the move to the suburbs in search of more space and better schools. Since most public school funding comes from property taxes and because suburbs typically have bigger and fancier houses, suburban schools just have more money to work with than their inner city counterparts. The fact that expensive homes leads to good schools, which leads to expensive homes, is a bit of a chicken and egg situation. Economists estimate that a five percent improvement in student test scores can raise local real estate prices by two point five percent. As the New York Times reports, the choice between living in the city or suburb becomes easier the less dense a city is, which would naturally affect a parent's choice of school. New York City and San Francisco, for instance, have a large population that commutes without a car and moving to the suburbs for those commuters would likely mean changing their lifestyle. In more sprawling cities like Phoenix or Dallas, commuting by car is often a given whether you live near downtown or not, so you might as well go to where the good schools are and deal with the ensuing traffic.
JON: Then there are the home buyers who are just too busy to look for a house during the summer months. They could be out traveling with their kids or maybe they just enjoyed a few too many mai tais by the pool and couldn't make it happen. Those buyers wait for the hottest week of the market to cool off and when the kids are back in school, that's when they make their move and start surveying the open house scene. And it isn't just new sales that slow down; pending transactions take a hit once kids go back to school, too. There are less buyers overall and the ones who are on the prowl are suddenly a lot less attentive. They're out buying school supplies and putting out every emotional fire that flares up with their depressed children and suddenly responding to their agent's emails takes a back seat. Joe Sinnona, team leader of The Joe Sinnona Team at Verdeschi Realty, argues that the distracted buyer makes for a great opportunity to go the extra mile.
JOE: Back to school season really affects real estate because the customers don't really focus on real estate. They're focused on personal issues. So I think that the agent needs to kinda work with that parent whose kids are going back to school, and really say, is there anything I can help you with to make that transition a lot better for you? You can't just take off when they're taking off, you have to kind of meet them and maybe do these drive bys or even these note cards that I have. I have each one of these note cards that say, I know you dread going back to school. I always write, but let me make your transition a little bit better. If there's anything you need, call me. And then I'll hear from them like that. We get this, so we're investing in the week off by hitting those targets, if you will, customers and clients that have put us on hold, but now we're just working toward the result of the following week. So we do that when when there's an off season, so to speak - we're always working. They call it downtime, but in real estate I call it over time.
JON: There's also a growing trend toward living closer to places you'd actually want to go to, such as shopping and entertainment areas. Much has been said about the death of the suburb, but the fact is that most buyers want to be closer to the action than they were in the past. Spending a gallon of gas just to buy a gallon of ice cream is an inconvenience that many would rather do without, and your kids' school definitely factors into that equation as well. Kids being back in school affects the market in some other less direct ways too. All those summer traffic patterns you got used to will go away now, meaning an influx of both the kind of person that drives way too slow through a school zone as well as the kind of person that seems to take it as a personal challenge to see if they can make it through without getting a ticket. With schools back in session, so to are school sports and other activities, and that means a lot more people out on the roads. It also means more opportunities to network and get your name out there. Eden Elder is a mother of five and had this to say about the benefits of getting to know a new school.
EDEN: Well, back to school season is absolutely wonderful for realtor moms, right? So many new parents to meet. Think future clients, right? New Teachers, new friends. I think it's fabulous. I think back to school season is filled with energy and I love to tap into it and not only enjoy it for myself and my kids, although it's not always enjoyable - but especially for my business, it's absolutely fantastic to do lead generation in back to school season. So I, I love it.
JON: And how do you do lead generation?
EDEN: Well, I try to get involved in the school as much as possible if I volunteer at school or I join the PTA. Two out of the five kids now have recently joined brand new schools, brand new to us, and so suddenly there's 2000 new people that I have to meet and that need to know that I'm a realtor. But I also want my kids obviously to find new friends and so you build relationships. It's not just a name and an address, it's truly about building relationships, getting to know more and more people in the community. I love it. That's what I like to do. It's kind of who I am, right? So it's good for my business.
JON: While some people view back to school season as the unofficial start of the holidays, others see it as a curious sweet spot for the market, depending on home buyer behavior. Sellers are more negotiable as they see the days start to get shorter and Halloween candy starts lining store aisles. Bidding wars are less common and buyers and sellers alike are ready to seal the deal. In colder regions, buyers are eager to settle into a new home before snowfall starts. No matter how the season affects your local market, the fact that schools are back in session doesn't mean you can rest on your laurels and coast through the holidays. There's always an opportunity to meet new people and continue to grow your business, and there's always someone new looking to buy or sell a house if you're willing to find them.
JON: That's it for our show this week. You can subscribe to Shop Talk on iTunes or wherever you get your podcasts. Join us next time as we chat with Joe Sinnona about how new agents can form healthy work habits from day one. Shop Talk is a production of The CE Shop.