One of the most common questions that I field from my sellers and prospects “when is the best time of year to sell a house”. My overarching answer begins with “it depends on why you want to sell, then what your plan is once you have decided to sell”. Obviously, no one sells in a vacuum – there is a future outcome to consider, specifically what your next steps will be. Let’s assume that the next steps are clear and I will focus in on the best time of year to sell a house in Toronto.
Selling a House in Spring:
If there are no external pressures to sell, then the best time of year is when most of the buyers are out looking for homes, which is the “Spring”. Keep in mind “spring” is misleading. In the world of Toronto Real Estate our “spring” starts the third week of January…yes that is one month into Winter, not the season of spring. There is snow on the lawn! Many home sellers believe that they need to wait until actual spring when the grass is emerald green, flowers are blooming, birds chirping and the Cherry Blossoms are blooming. This is no longer the truth.
The strength of the Toronto Real Estate market is so robust that the time frame has expanded through to the beginning of the calendar year. Toronto’s spring real estate market is the longest of the year, running five months or through until the end of June when people head off on vacation again. This is one reason why it is the best time of year to sell a house, in theory.
Holidays = Decisions:
Another important factor to keep in mind as to why there are so many buyers house hunting in Toronto. This is a little-known fact, however, when you think about it it makes a great deal of sense: people make decisions about their futures when they are around family and friends, January follows the holidays. Sellers have had time to sit back, reflect and discuss what they want to do next.
Compounding this interest is that the buyer market is quieter from mid-November through to Mid January, so there is pent-up demand. Buyers are ready to spend because they have not seen many quality buying opportunities and as much as they wanted to buy through the holidays, work parties, family events and vacations had their primary attention.
Selling a House in the Fall:
The fall real estate market can also be an excellent time to sell. It is a shorter market. starting the second week of September (after children have gone back to school) and typically slows down in the middle of November. There are not as many transactions and most of the value increases happened in the spring market.
Selling a Condo:
Condos are a market unto themselves. Condos buck most housing trends in Toronto. The primary reason being that a vast majority of condos are 1 bedroom units. One bedroom units mean there is typically one or two decision makers who do not have any dependents (ie children). Most condo owners do not own seasonal properties either, so their summer vacation plans don’t typically affect their real estate search because they may only be away from Toronto for one week. Condos trade year round. There are two spikes in activity (see above two seasons) however, there is always activity in the Toronto condo market.
Selling an Investment Property:
If you are thinking of selling a house that has been an investment – not a primary residence for you or your family. If there has been no lifestyle factors like raising children, proximity to work, etc.. then this is a different story. As Warren Buffett says to buy when everyone is selling, sell when everyone else is buying. The froth in the market can tell you a fair amount about the psychology of sales. We are all human, we typically choose to do what others are doing, whether there is a logic behind the move or not. Obviously selling when everyone wants to buy is an excellent decision.
If you have owned for many years and seen a large capital growth of equity in your home then it may make sense to sell…assuming you have your next steps planned out (retirement, a new investment vehicle, travel, further leverage into other investment homes, condos or apartments, etc…). If you have owned an investment home in Toronto for years than you will have seen a few cycles, whether shorter ones of 6 months to longer cycles of 5 years (Toronto real estate hasn’t had a 5 year slow down in over two decades – Toronto has had a couple of 6 month slowdowns in the last 10 years).
My attempt to state the best time of year to sell a house in Toronto is a broad stroke generality. There are many factors that can pop up throughout the year. There are submarkets whether in a timing sense or in a localized neighbourhood sense. Media headlines can also shift a market temporarily as well.
It is essential to work with a professional, active realtor who will keep you abreast of what is actually happening in the Toronto real estate market. If you would like to discuss anything in more detail, please reach out to me.