Best Time of Year to Sell a House
“Is It A Good Time To Sell A House?” is likely the most commonly asked question amongst my homeowner clients. There are a number of ins and outs to get to the bottom of whether my clients should consider selling. Let me break down the questions and answers that I provide. Let me start by saying “YES!” may or not be fair to your specific situation. In general, the answer is “YES!” but not before delving into the caveats and essential questions below.
Seasonal Market Fluctuation
No matter what the type marketplace you want maximum exposure to as many buyers as possible. There are certain seasons of the year when there are more buyers available. The Spring market is one great time to sell (FYI starts in late January, not March!), the second busiest market is the Fall (starting after children return to school – typically the 2nd/3rd week of September). So, if there are more buyers vying for your home you should get a higher price than any other time of the year.
When we look at Toronto specifically we know that the summer is a time of year when many homeowners travel overseas or spend time up in Ontario’s cottage country. Needless to say but, these home buyers are not thinking about purchasing your home. Choosing the right season to sell your home can affect the sale price. Keep one very important factor in mind: predicting the future real estate market is impossible…see the section “careful about crystal ball planning, below.
Do You Actually Want To Sell Your Home Now?
This is, in my opinion, the most important question: Do you actually want to sell your home right now? If you don’t want to sell and don’t have to sell for financial reasons, etc., then don’t. Is it a good time to sell a house, doesn’t apply here. Stay put, enjoy your home. It’s that simple. A home is a lifestyle decision. We must not forget that.
It’s only been over the last decade that Torontonians have viewed their home as an investment because of massive value gains in the real estate market as Toronto has asserted itself as a North American economic leader. You need a roof over your head in this climate, so step back and ask yourself if you actually want to sell. Maybe staying put is the wisest move for you. It’s very subjective. Only you can answer this question.
Next Purchase
When asking yourself is it a good time to sell a house, do you also plan on purchasing another home or condo? Buying in and out of the same market is typically the wisest financial move you can make. Here are a couple of examples to consider:
- Down Market Example: If the housing market is down in price then moving up to a more expensive home is a great move. Why? The percentage drop in value is a dollar saving to you. Your home was worth $1 million, drop of 20% in value equates to $800K; Your dream home was worth $2 mil, a drop in 20% in value equates to $1.6 mil. You SAVE $200K in real dollars.
- Up Market Example: If you are downsizing or down-lifestyling (you have owned a large home but want the flexibility to travel then buying a smaller space like a condo may be a great move). $2 million home goes up 20% in value, now worth $2.4 million, the condo was $800K, 20 % increase bumps that up to $960K. You ultimately netted $240K.
A wise person once told me that it matters what you first purchase then what you finally sell for at the end of your days. The transactions between are not that material as time will show. There are many examples that could be highlighted. The above is to give you a general sense of what to consider along the way.
Equity Allocation Plan
If you plan on selling without buying back into the market. Examples would be: to sell an investment property, a vacation property, or you’ve decided that renting is the best option for you. So what are you planning on doing with the equity from the sale of the property? I’m a big believer that you need to consider the big picture and long-term goals that you have.
I always recommend speaking to a good money manager if you are divesting your real estate holdings. You need a plan in place. It will simplify the decision-making process when you know what your next steps are. (Even if the next step is to travel the world for a year!)
Careful About Crystal Ball Planning
As I alluded to above, there are times of the year that are generally a good time to sell. However, it is essential to acknowledge that the real estate is a market and it can be very difficult making real estate market predictions. Markets fluctuate, sometimes for obvious reasons:
- Government intervention;
- Equity Stock Market volatility;
- Media headlines….the list is endless.
We are human. Sometimes humans make irrational decisions. Anything can impact consumer confidence and ultimately a market. Careful not to hold your breath for a brighter day ahead in the short term. Planning in shorter windows (ie. sub 1 year and up to 3 years out) can be a challenge. Toronto’s real estate market has completely bucked all historical trends for more than 20 years. What this means is that many people believe our real estate values go up in double-digit increments on an annual basis.
But we only know the past and cannot predict the growth of the future with any true accuracy. That being said, Toronto real estate will be worth far more in ten years than it is today! (this is a long enough timeline that market fluctuations will come and go but longer-term fundamental factors like finite land and population growth will drive values).
If you aren’t sure that its a Is It A Good Time To Sell A House, reach out to us here. We will walk you through your best options so that you can make an informed choice for yourself. I’m also here to guide you through your next steps whether investment or lifestyle moves in real estate.
