At the risk of sounding ‘spammy’ and making you think, “Why on earth does Johnder want me to sell my house? Where will I live? Does he even care about my wellbeing?” — let me explain why now could be the absolute best time to sell your house.
Don’t get me wrong — I don’t want you to sell your house. Unless you absolutely have to.
If you’ve already sold your house in the past few months… at any time in 2021… or 2020 for that matter, you’ll know how ‘crazy’ the market is. How many offers you got. And even if you didn’t get so many offers, your eyes probably bulged when you saw the prices being offered for your house.
Now I wouldn’t tell you this is the most opportune time to sell your house without backing up with evidence — data; stats; actual real life experiences happening out there right now.
So — if you’ve been thinking:
“Maybe my house is getting small with me, my spouse, and all the kids locked down in here due to this omicron thing happening. I need a much bigger house.”
“Hmmm, I’m thinking of cashing out of my current real estate investment and re-allocating my assets to another investment… or perhaps multiple investments.”
“I’m really not liking where I live anymore and I think I should move somewhere else.”
“It’s time for me to right-size… and I need to cash in all the hard work and equity I’ve built up over the years.”
— if this is you, read on.
Remember way back in2016 to 2017, when the number of houses listed for sale in the market started to become ultra scarce, sales started to increase dramatically, and record prices for houses were being seen day after day?
This kinda feels like the same market. Except it’s even more amplified.
To give you an idea of just how ‘hot’ this market is (and, ugh, I hate sounding like a salesy real estate agent… but seriously, this is supported by stats):
In December 2016:
– Sales increased 8.6% compared to the year before (totalling 5,338)
– New listings dropped 11.7% (only 4,188 came to market that month)
– Active listings hovered at 4,746 (a drop of 48.1% compared to the year before)
– Average priced ‘surged’ 20% (remember when it was only $730,472?)
– It took 20 days to sell a house (but that’s down 31% from December 2015)
– Months of inventory was 1.1
– Average selling price to list price was 101%
– Sales to new listings ratio was 73.3%
For those of you who bought at ‘peak’ 2016/2017, meaning the months leading up to the moment the government put the breaks on the market, you remember how challenging it was to be a buyer.
Multiple offers were happening everywhere.
You literally had your fingers on the button of your computer, or phone, to check for new listings of houses for sale — because you knew, if you missed out, you’d be too late.
And you remember how high prices were jumping. At almost ridiculous and unseen levels.
Now… let’s talk about December 2021:
– Sales actually decreased compared to December 2020… but totalled 6,031
– New listings dropped 11.9% with 5,174 coming to market
– Active listings… get this… 3,232, a drop of 59% compared to 2020 (look at 2016 numbers again)
– The average price surged 24.2% and sat at $1,157,849 (and 2016 was what… $730,472? That’s an increase of 58.5% from 2016 prices!)
– It took 14 days to sell a house (if it did sell — otherwise, if it got relisted, 19 days total to sell)
– Months of inventory sits at 0.9 (if no house gets listed on the market, everything in the entire Toronto Regional Real Estate Board inventory would sell in less than a month)
– Average selling price to list price was 109% (let’s not even talk about how it’s 123% in Clarington)
– Sales to new listings ratio is 73.1%
Now… we’re talking averages here.
Let’s consider the fact that in Durham, the months of inventory is 0.5. That’s right — if nobody else lists their house in Durham for sale as of this moment, everything would be sold (at this pace) in 15 days.
So — back to selling your house — why is now the best time to do it? (And again — this is only if you’re thinking of selling your house right now — I don’t want you to end up without a home of course.)
First, a couple of preambles:
1. Nobody can ever guess the ‘peak’ of real estate prices and the most ideal moment — you’re either selling on the way up to the peak, or you’ve come too late and prices are on the way down.
2. If you’re selling, you ultimately have to buy — so the ideal situations you face as a seller (which will make you feel almighty, powerful and literally on top of the world) — you’ll feel the exact opposite when you’re buying (bullied, rushed, pressured).
3. Real estate doesn’t always go up — but for the many years since the real estate board has tracked numbers, there have been more up years than down, so if you don’t sell quite high enough in your eyes, remember that whatever you do buy is still continuing to appreciate in value.
4. Taking advantage of the current sales prices only works if you’re buying in the same market — or renting (if you’re not sure what to do next)… or moving in with your parents (LOL).
Back to the question — why is now literally the best time (or one of the best times) to sell… and why you should do it sooner than later?
This pandemic has created an environment of scarcity. You would think that lockdowns would discourage people from going out and buying houses due to the fear of catching covid and falling ill.
Having worked with my real estate agents and my own clients over the past two years while this pandemic and lockdowns transpired, I have seen firsthand what’s happening in the real estate market.
We’re pouring our money into tangible assets to hedge against inflation (and oh boy has inflation surged during this pandemic).
Lockdowns and being at home (with the spouse, and kids, and perhaps other relatives) have led many to realize they’re living in a smaller house and they need something bigger.
Added to that, spending more time at home has led many to search for something better and more ideal for their family.
And the government printing money, infusing it into the availability of cash due to this pandemic, has given more financial resources to many people which gives them heightened purchasing power.
What did this lead to?
An increase in sales, a decrease in inventory, and double digit price growth.
People started buying houses in record numbers from the start of the pandemic until now.
Inventory kept decreasing and decreasing leading to scarcity in the market.
Low supply… high demand… basic economics… led to prices surging.
As I reviewed market stats in the past few months leading to now, I noticed a slight decrease in sales, in spite of decreasing inventory.
Now some may think — wow, sales are going down, prices must soon follow right?
Wrong. The pace at which sales dropped still hasn’t kept up with the drop in inventory. So even though sales may seem like they’re slowing down, there still isn’t a lot of inventory in the marketplace. Which means the market for houses is still scarce. There are still a lot of buyers making offers on properties and losing. And prices are still increasing.
If you are selling your house right now, you are literally listing in one of the lowest months-of-inventory levels in a very long time, and in one of the highest sales-to-new-listings ratios in a while.
Go to your favourite listings website, or check out my real estate app – browse for listings in your neighoburhood.
How many do you see?
That’s right. Maybe 1… 2 if you’re lucky… but for the most part… no inventory.
And yet you’ll hear that for one of two of those listings… 30 offers came in… maybe more… sure, maybe less. But if only one buyer was able to succeed… what happened to the rest of them?
They’re still looking. They’re still competing. And as time progresses, more buyers will enter the market.
But will inventory keep up?
Statistically, spring is the busiest market of the year. The exception to this was during the first lockdown in 2020 when sales dropped and everyone stood still to see what was going to happen to the real estate market… and life in general. And then sales started to surge.
In the current market, we will see inventory start to creep up. That’s a natural occurrence that happens during every spring market every year.
But guess what?
The number of buyers entering the market… yes, those sitting on the sidelines waiting to see what happens… they come in as well. And we hope that an equilibrium happens with an ideal balance of supply and demand, leading to steady price growth.
That’s not happening at this moment.
Right now, inventory is superbly low. Buyers are voraciously making offers on houses hoping to buy ahead of a competitive spring market. And there’s no certainty of what will happen this year… with the threat of interest rate increases, ideas of new taxes being imposed by the government… who knows what could happen?
If you’ve decided to sell your house now, due to the strategical advantages the current market brings, just remember one more point. You can never guess when the actual peak of real estate prices will happen. If you keep waiting, you may get a higher price — but the house you’re buying next will also be higher. If price growth starts to soften, you may not get the highest sale price, but you’re not buying at the highest price either.
Lastly — make the move that’s right for you. Yes, selling is stressful. And in this market, buying is very stressful. So if you don’t need to sell — just don’t sell. Stay put. Enjoy your house.
But… if you want to scratch that sales itch and make a move, you’re currently looking at the most ideal selling situation right now.