When should you put your home on the market?
Think the spring is the only time you should enter the real estate market? Think again. The numbers suggest a mid-May sale isn't your only option.
BY: David Fleming
If you’re contemplating the sale of your house, and you think that Victoria Day weekend marks the end of the spring market (and your best opportunity for a successful sale), I have to respectfully disagree. There is no doubt that real estate is a cyclical industry, and as such, it’s victim to slower periods throughout the calendar year. But contrary to popular belief, listing your single-family property for sale in mid-May is not your only option.
Year after year, we see the same jump in new listings as the flowers bloom and the front lawns become lush with green grass. But if you plan to list your home during this season, you can also plan on one other thing: competition. You’re not the only person who had this bright idea, and the numbers back it up. January 2011 saw 8,937 new listings in Toronto; that number ballooned to 16,076 by May of 2011. The same trend holds true in 2012, with 9,655 new listings in January and 16,436 in April, which shows us that we’re primed for another busy May.
So what’s behind this May boom? Part of it has to do with the weather, of course. Sellers feel that their homes will be more attractive and marketable in the spring, and I don’t disagree. But sellers also know that more buyers are out in the spring. So who came first, the sellers or the buyers?
The sellers sell because the buyers are out in full force. But the buyers are pounding the pavement because of the slew of new listings that hit the market every May and June. It’s not unreasonable to assume that some buyers put off their purchase in January and February because they wonder what else might come up for sale when the market is busier a few months down the road.
Or maybe buyers hibernate in the winter like those damn raccoons living in your attic. Looking at actual sales sheds some more light on the topic. January of 2012 saw only 4,567 sales in Toronto, but that number more than doubled to 10,350 in April. And if you really want to get technical, consider that the sales-to-listings ratio in January was 47 per cent, but in April, it jumped to 63 per cent. This means that while the number of listings jumps substantially, the number of sales increases at a higher rate. So it’s only reasonable that a seller may think “May, or bust.”
But the spring market continues quite favourably into June, and if last year is any indication, we see a very small decrease in new listings, and the sales-to-listings ratio actually increases—last year it jumped from 62 per cent in May to 69 per cent in June. And if you miss that window entirely, the battle is not lost. Every month from July to November of 2011 saw between 7,000 and 8,000 sales, which means that the market is steady and consistent.
Consider a couple with school-aged kids who doesn’t have the time to house-hunt in May and June, but has all the time in the world in July and August when the school year ends. This family can really focus on searching for their dream home, and they won’t have to deal with the same chaotic weekend open houses that they’d have experienced only two months earlier. Believe it or not, there are still a slew of buyers looking for homes in the otherwise-relaxed summer months. If you’ve missed the summer altogether, well then you’re in prime position for the busy fall market that shoots up like a rocket the day after Labour Day.
Now, if you’re a condo owner, and you’re wondering how all this affects you, I’ve got great news: it doesn’t. The condo market is healthy pretty much 12 months a year and is generally immune to the hot-and-cold streaks of the housing market. Oh sure, you’ll want to avoid listing your condo in the two weeks before Christmas, but aside from that time, it’s smooth sailing for the rest of the year.