Sometimes I find it amusing to read articles that "experts" have written about the Real Estate Market. For example, the one attached below states January 20th as the best day to save money on your home purchase. Yes, they have analyzed their numbers, and there is ONE DAY that is supposed to be the best. Apparently, you can save $20,000 if you purchase your home next Tuesday!! With that in mind, Team Khan RE/MAX will be renting a bus and doing a Buyer Sales Event next week! Haha! Buyers, don't get too excited, you're going to want to read on. Bad news for Sellers though, the article goes on to state that this is the worst time for you to sell. Now hold on a second sellers, before you contemplate hurting yourself, let's look at what is actually happening in the Real Estate Market right now.
Not only today, but since 2010, Inventory remains low. During the winter months, inventory decreases even more. According to Home Search Pros, as of noon today, there are 442 active listings in Markham. Across the Greater Toronto Area there are 9,951 listings active. Of that total, 2646 are condos, leaving about 7300 homes available for sale. The GTA sells approximately 90,000 properties per year. Therefore, we don't have much inventory at all!
What does this mean for our Buyers and Sellers? This translates to the Greater Toronto area having just over a month of supply, meaning if no new properties came on the market, in about a month we would be out of inventory. In a spring/summer market, these inventory levels will be 2-3 times higher. Demand remains at an all time high. Supply and Demand principles state that if demand is high and supply is low, the value of the commodity increases. We are seeing more multiple offers (bidding wars) over the past two years than we have in the past. Why? Supply and Demand. People will pay more to get into the home they really want. With no guarantees that the inventory will increase anytime soon, a buyer does not want to lose out on the home they love and the longer they wait, price appreciation makes home ownership that much more difficult. Is it worth it? Amortized over 25 years, and with the low cost of borrowing, this translates into a few extra dollars per month but the buyer gets the home they love rather then settling on something that isn't up to their liking. Keep in mind that the price of the home still needs to be at market value. Buyers will not pay more for an already overpriced property.
The article states that this is a bad time to sell. On the contrary. If you're a seller, this is the BEST time to sell. You have no competition. In the spring and summer, your neighbours will hit the market, similar homes in the area hit the market, and the differentiating factor then becomes what? Price!! So when the market is flooded with similar product, you will not be able to have the same return on your investment as you would when you're the only game in town. Again, it is important to remember that you cannot go out and put a ridiculous price on your property. The Buyers are well informed and your home will sit on the market if you don't price it at market value. It's at that point that you receive the most interest and the best possible chance of creating a bidding war. The other thing that needs to be taken into account is the Appraisal of the property by the bank. Just because someone wants to pay more for it, does not mean the deal will go through and you will be able to retire on a tropical island. :) Ask your Realtor about the proper way to price your property for the best possible return.
There are a lot of articles making there way around the net and through the media. Before you buy into the hype, give us a call and let us take you through the actual numbers and the current state of the market. I'd hate for one of my buyers to lose out on a home because of false expectations on price. For our sellers, waiting for the spring could cost you A LOT of money.
If you don't have a Realtor that you can trust with answers to these questions, I'd love to be your go-to guy. GIve me a call anytime to discuss your personal goals for home ownership and stay informed.
Garry Marr | January 12, 2015 4:08 PM ET
Tyler Anderson/National Post
A Toronto real estate company says its analysis of five years of data from the region says the best day to buy a home is Jan. 20.
Thinking about buying a house? Is there a perfect day to pull the trigger? How about next Tuesday?
A Toronto real estate company says its analysis of five years of data from the region says the best day to buy a home is Jan. 20.
“The savings amounts to a lot for the buyer,” said Rokham Fard, chief marketing officer of The Red Pin, adding he calculates the discount at about $20,000 on a Toronto home compared to the second cheapest month, July.
Of course, it also happens to be the worst point of the year to sell a home but as Mr. Fard says, “if you have to sell, you have to sell.”
He says his firm looked at five years of transactions and found January was the cheapest month for average price going back to 2010. Conversely, May is the most expensive month..