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Many consumers ask themselves when is the best time to buy or sell your home. A Real Estate website TheRedPin conducted a 5 year GTA analysis that we would like to share with you.
The Toronto housing market today is a totally different beast than it was five years ago. While in 2010, the average price of a GTA real estate transaction rarely broke the mid $400,000’s, fast forward to now and the numbers have jumped by a staggering 30 percent.
Despite the colossal price spikes and market shifts over the past half decade, one trend has remained true and consistent – January has proven to be the least expensive month of the year to buy a home. Not just in 2014 but in every year since 2010.
While typical real estate trends tell us that spring and summer are the best times to buy a home because of the overwhelming number of homes for sale during that time, the data tells a different story when looking at prices. The Toronto Real Estate Board (TREB) data provide insights into the average price for all housing types since 2010.
January and May are Very Special Months
Prices in January over the past five years was $461,761 – nearly $16,000 less than the next least expensive month* and $60,000 lower than the highest month.
Applying the same logic, the month of May was found to be the most expensive month to buy a home, which is great news for sellers looking to sell their property for a ‘fair’ price.
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Why are Prices Lower in January and Higher in May?
Between the notoriously cold Canadian weather and the post holiday slow down, fewer people are out actively house hunting in January. With fewer buyers on the market, competition dips, as do prices. As homeowners are putting their properties on the market in January rather than waiting till the peak spring and summer seasons, it’s fair to assume they are more motivated to sell, resulting in lower prices and more room to negotiate the best price.
In comparison, May is the most active month for house hunters. Thanks to the pleasant summer weather, everything from viewing open houses to moving are all made easier in sunny weather conditions. Plus, families looking to move often chose to shift homes when the kids are off from schools during the summer holidays. This all translates to more buyers and therefore, higher prices and competition.
Days on Market: Best Time to Buy and Sell
The longer a house spends on the market, the more motivated an owner is to sell their property. With higher days on market, house hunters have more leverage to negotiate and bring the price down. With fewer active homebuyers in winter, the average days on market in January for the past five years was 34 days.
The average days on market in the spring and summer months hover around the low 20s, meaning one thing, buyers are snatching up homes left, right and centre – which is ideal for homeowners looking to sell their home.
Listings: Best Time to Buy a House / Sell a House
The typical holiday season slowdown means fewer homeowners put their properties up for sale in January. With a dip in the number of new listings, buyers have a smaller pool of homes to choose from.While this may seem like a drawback at first, it can actually work in your favour. You won’t be overwhelmed by the amount of houses up for sale, instead you’ll only be dealing with the most motivated sellers and the most affordable homes on sale.
More properties are listed on the market in May than any other time of the year. Homeowners looking to sell should see this as a sign that real estate has hit its most active season, and buyers are out in full swing, ready to purchase a home. For sellers, this is the time to be creative and set your home apart from the competition.
Difference between Housing Types:[home_insurance_square_widget]When one looks at the best time to buy and sell for each housing type, separately, none of the homes seem to fall within January or May. One hypothesis is this is largely due to the constant shift in the number of new listings each year, which impacts the overall average prices and trends.
This post is brought to you by TheRedPin. TheRedPin is a different kind of Real Estate and Mortgage Brokerage, focused on delivering an exceptional real estate experience to all their customers.