We all know that hindsight is 20/20. Wouldn’t it be nice to have 2020 vision as we navigate the year 2020? We have some strong beliefs as to how to upgrade to a bigger house in 2020.
Do you ever look at real estate listings in New York City?
If you are like us, you certainly do!
Do you ever try to imagine moving to NYC with the intent of purchasing a house?
Does it seem financially impossible?
For many people it is!
It is incredible how common it is to see NYC houses and condos up for sale for $30 million USD+++. Now reflect for a moment about how “affordable” Toronto’s housing market is in comparison. We are clearly different cities, have different histories and population numbers. But, here’s the thing. We are historically 20 years behind NYC in values. Yes, this is a fact. Buying today will generate a great deal of wealth over time. It may seem to be an impossible leap at this stage but, those who purchased many years ago paid a fraction of today’s cost to acquire. One day future generations will look at Toronto in a similar light to how we are looking at NYC today.
There is an opportunity in Toronto’s market this year.
2019 was likely the greatest year to “Upgrading To A Bigger Home”. We predicted this at the beginning of 2019. With the appreciation of Detached houses in downtown Toronto, we proved to be correct. We had seen a large drop in Detached housing values in Toronto and low-interest rates, there is likely no better time than we have seen in years. Seemingly gone are the days of historic value increases in this segment of the market (note: condos and semi-detached houses are doing their best to continue the skyward value increases on an annual basis).
As for 2020, we continue to believe this a great time to upgrade your Toronto home. There remains a small window of opportunity. The cost difference between a 2 bedroom condo and a semi-detached house is relatively small with the appreciation of condos in recent years. Also, the semi-detached houses and detached houses are actually pretty close in value in terms of actual dollars.
Neighbourhoods that have been a major financial stretch for those living in smaller homes are not as difficult. The gap has narrowed, to a degree that there is a real benefit to consider. There are houses in Lawrence Park and Lytton Park that were selling for 3.5 million at that now 2.8 or previously selling for 2.9 and now being snapped up for 2.4 million. This cannot be said of every neighbourhood as homes that are worth approximately 1.5 million are still moving quite well.
Next Steps Towards Buying A Bigger Home In 2020:
- Call a trusted mortgage broker (need one? We can help, just send us an email, we would be happy to introduce you to an excellent broker). It is essential to know your financing options. Once you get a sense of what you can afford above and beyond your current home it’s time to move to the next step.
- Call us, we can discuss what your current options are. Which areas make the most sense for your desired lifestyle, future equity/investment growth. Ultimately assist and advise you and your family in the most considerate and professional manner possible.
- Deciding on whether to buy or sell first, we have carved this one into its own section. See below…
Buy or Sell First?
What blog of ours doesn’t contain the words “it depends“? Well, this one is no different: It depends. To answer the question of whether it makes more sense to buy or sell first, it depends on a number of factors. Here are some points to consider as you make the decision as to your next move.
- The specific location of your current residence in Toronto. If the house you own is a highly desired space in a hot price point it may very well make sense to purchase the bigger home first, then turn around and sell your existing home. Lower price points typically sell much more quickly in competition (if you used the correct strategy and positioning!)
- The current state of your home. Is it ready to sell at its peak look and feel? Or, does it require some investment and elbow grease to get it up to snuff?
- Perhaps you would like to know exactly how much equity you can pull out of your current home before purchasing your bigger home? In this case, you may choose to sell first. Sounds simple, right? But, here is the rub…if you sell your first home before purchasing your future bigger home, where will you live if you cannot find your next purchase before the closing date of house #1? What’s your plan B? Also, another aspect to consider: if the detached market you are looking at has a price drop you will save money; assuming that you are selling a house that is in a hot market you are likely looking at incremental value increases as you hold it…yes, this is market timing but it’s also a roof over your head.
There are so many important things to consider when upgrading to a bigger house. The above is a very general overview, truthfully this is only scratching the surface. Call us, we can help. We advise clients of their next steps each and every day! One day Toronto’s home values will be just as seemingly impossible as New York City’s!
