IS NOW A GOOD TIME TO SELL YOUR PROPERTY?
Thursday Dec 03rd, 2020
This is a question I am always asked so I thought I would address the question.
The most common reasons why people decide to sell their homes include changes to their financial situation, a change in job, a growing family or retirement. Another factor is the low interest rates we are presently experiencing which makes it attractive for some homeowners to “move up” to a larger home.
Real Estate Cycles
For almost everyone, buying their home was probably the best investment they ever made. Buying your home is both a sound investment as well as it provides shelter for your family and it gives you a sense of pride of ownership.
However, real estate is subject to the law of supply and demand which creates cycles in the market. A shortage of homes generally means prices rise. This cycle is commonly know as a “seller’s market”. Alternatively, a surplus of homes can result in a slow down in home sales or even a reduction in prices and is often referred to as a “buyer’s market”.
Which market is best?
Obviously, we all want to sell our home quickly and for the highest possible price. Today, we are experiencing a “seller’s market”, as there is a shortage of homes listed on the market and many buyers are competing for the same house resulting in top prices – sometimes even over the original list price. However, if you are planning to purchase another home after the sales, chances are you will be competing in the same seller’s market faced with higher prices.
In a buyer’s market you may find you have to wait longer to sell your home for a fair price. However, their advantage of selling your home in a buyer’s market is you will have more selection and pricing options when you go looking for your new property. If you decide to have the current market cycle influence your decision to sell, remember there are trade-offs to selling in either a buyer’s or seller’s market. You may be concerned that if you trade up to a larger home in a buyer’s market you will lose some of your home’s equity in the sale. But, while you may sell your home at a “discount”, it is likely you will purchase your larger home at an even greater discount. The upside is you then own a larger asset with an even greater potential for appreciation.
Having been a realtor for over 15 years, I know the weather can affect buyer demand; there are fewer buyers during the cold and snowy winter months, however, as a seller you will be competing with fewer homes on the market. As people starts coming out of hibernation in spring and gardens begin to bloom, buyers with school aged children like to purchase in spring so they can move into their new home in the summer. In spite of what I have said, the reality is people sell their home throughout the year so consider season as only one factor in deciding to sell your home.
In summary, there are many important issues that determine when someone decides to sell and may not have control as to when they sell. If having an evaluation of your home would be beneficial to you for perhaps refinancing your mortgage, to update the value of your asset or for selling please call me at 416-891-4705 or email me at firstname.lastname@example.org
By Joan Hing King, Real Estate Investment Expert