By: Penelope Graham, Zoocasa
The air has bite, the sun sets early, and driving conditions are poor – many Canadians choose to weather these winter conditions with a little hibernation and hygge sensibility. Admittedly, heading outside to go house hunting isn’t a high priority. This is reflected in market trends; there were 25 per cent fewer sales in the Greater Toronto Area in January 2017 compared to the previous May.
That’s why real estate professionals will recommend that, if possible, listing at this time of year should be avoided. However, if external circumstances have required that you sell your home in January, it doesn’t mean you need to take a desperate tack – in fact, you may actually get more for your home in January.
Here’s what to consider when listing your Toronto townhouse, condo or detached home after the holidays.
The January Price Peak
While the holiday season is decidedly dead for real estate, an interesting phenomenon happens in the new year; buyers who shelved their searches during their vacations return to the market in what Is the busiest buying season behind spring and autumn.
But there’s an issue facing this fresh crop of buyers - available inventory, especially in the Toronto real estate market, can be extremely tight, as many sellers wait until the spring to list.
That creates a supply and demand imbalance that puts upward pressure on prices, which can translate to higher sales returns compared to even a month prior.
For example, those who sold their GTA homes in January 2017 received on average $40,273 more for their home than those who sold before the holidays, according to the Toronto Real Estate Board (TREB).
The start of 2018 also looks to be especially brisk, if a busier-than-usual autumn market is any precedent; TREB data reveals that while sales usually contract by 13 – 24 per cent between October and November over the past five-year trend, they rose 4 per cent this year, due to a buyer urgency that very well could carry over into the new year.
Market to Motivated Buyers
There are a few reasons why buyers may be in the January market, and, like many sellers, most are facing pressing time constraints.
The first is that January is typically a busy time for mortgage pre-approvals; buyers who had intended to shop in the new year are taking the steps of getting their financing. Particularly organized buyers who want to participate in the spring market are also going through the motions of pre-approval qualification. Once they have it, they may just take an early look at what’s available now.
“The fact is, if you’ve waited until spring to get a mortgage pre-approval, you’re already late – and there are a few real estate market factors that will work in your favour if you act now,” says Mike Bricknell, a mortgage broker at CanWise Financial.
Another reason is that savvy buyers know January can be a less competitive time to buy a home, and make an effort to peruse the market early to avoid the stress of bidding wars, which are typical during the peak spring market.
As well, recently implemented B-20 mortgage rules, which have reduced affordability for many buyers, could prompt those with slashed buying power to seek out a deal at the beginning of the year.
“It is very beneficial to get your mortgage pre-approval when the housing market is quieter, especially as there have been many recent industry changes that may have affected what you can afford,” Bricknell adds.
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