Why Spring Brings out the Zing in Home Buyers
NEW HOME SHOPPERS FINDING NOW A GOOD TIME TO PURCHASE DESPITE SLUGGISH MARKET
CHICAGO - It happens every spring—the first brave flower buds peeking up from the soil, the sharp thwack of a baseball hitting a Louisville Slugger, the wafting aroma of red hots sizzling on a Weber Smokey Joe, and pent-up home shoppers pounding the pavement in search of the perfect new abode.
Like a perennial cycle of nature, spring continues to be the ideal season for house hunting, especially among those seeking new construction. But beyond the obvious reasons—such as balmier temperatures more conducive to home touring—the experts say there are many factors at play that bring out the buyers, even in a relatively slower sales market like the one Chicagoland is currently experiencing.
“Springtime is typically when people come out of hibernation and get motivated to do the things they couldn’t or didn’t want to do in the colder months, such as yard work and outdoor activities,” said January Verdich, sales manager for Metropolitan Development Enterprises, headquartered in Niles, developers of Rainbo Village—a new community of attached homes in Chicago’s Uptown neighborhood.
Mary Musillo, sales manager for Libertyville-based Cambridge Homes—builders of Kilbourn Woods, a new community of single-family residences in Kenosha, Wis.—agrees.
“This is also traditionally the time when people start thinking about improving their homes or moving,” said Musillo. “Spring cleaning projects begin, and that’s when people begin to scrutinize their existing living spaces and ask themselves if it’s time for a change.”
In Chicagoland, Verdich said the spring buying season usually kicks off following the Super Bowl and after all the holiday bills have been paid. Additionally, the February through April period is the time when taxpayers are taking stock of what they’ll owe to or be refunded by the IRS, which can also factor into the decision to begin shopping for a new home.
“Spring is also the time when many families start thinking ahead,” said Donna Ward, sales manager for Green Ridge—a community of attached and detached homes in Waterman by South Barrington-based Kennedy Homes. “Many house hunters who are strongly considering a move want to be settled in before the start of the new school year in the fall or at least before the end-of-the-year holidays. And for those who desire new construction, unless they choose a pre-built inventory home that may be available for early delivery, they quickly learn that the time it takes to build a new-start home from the ground up is at least five months, depending on the builder and location.”
These factors may help explain why a motivated early bird springtime shopper catches the buying bug, as well as the worm. But what compelling reasons can new home builders offer that now is, indeed, the opportune moment to claim a new construction home?
“Quite simply, the numbers are still in your favor, and the cost of waiting any longer is too high,” said Dan Kovacevic, immediate past president of the Home Builders Association of Greater Chicago and principal with Mitroff Group, Ltd.—the Arlington Heights-based residential builder of Aspen Trails, a townhome and single-family community in Bolingbrook.
“First off, it’s important to consider that we’ve enjoyed a phenomenal string of years of record low mortgage interest rates. While they may inch up, potential buyers need to remember that—historically speaking—mortgage loan interest rates continue to remain low,” he noted. “The current climate of slightly over 6 percent interest on a 30-year fixed mortgage still offers a terrific rate that can save borrowers thousands of dollars over the life of their loans compared to rates in past years.”
What’s more, “we’re seeing an increasing number of builders offering special financing deals to help customers qualify for a mortgage and afford the home of their choice,” Kovacevic said. “The builder may partner with an outside lender to provide a lower fixed or adjustable rate, free closing costs, zero points, or another valuable borrowing incentive.”
With Chicagoland home sales adjusting to changing market conditions in the past several months, prime opportunities also abound to move into a home without waiting, he said.
“Also, there are usually pre-built inventory residences available for buyers to select from—many of which may be ready for immediate delivery,” said Kovacevic.
Contrary to gloomy new home sales forecasts in the media, Ward and many others have witnessed a steady influx of eager buyers this spring.
“We’ve seen more buyers than lookers visiting our communities, and these are motivated, educated consumers who have done their homework,” said Ward, who added that Kennedy Homes’ sales numbers are up compared to this time last year in her community.
“I’m definitely noticing that home seekers are optimistic, not pessimistic, about the market,” said Musillo, who has also observed stronger home shopper traffic lately at the Kenosha community where she sells. “Smart shoppers realize that purchasing real estate continues to be one of the best investments you can make.”
“Business isn’t as bad as the media would have you believe,” Verdich noted. “Buyers realize that there are a lot of great deals to be had out there.”