As a move-up buyer, you are in an interesting position in the real estate market. You are already in the market, which is quite an accomplishment in the GTA. It’s a very tough decision to make and it can get a little bit stressful. When is a good time for the move? What is the best time of the year? Do you buy or sell first? There are decisions to be made and this post’s aim is to guide you in the right direction.
When the market was in a frenzy in early 2022 it seemed to be a good time because you were guaranteed a good price on your property. However, when we look at the stats it actually seems to be a better time for move-up buyers now. Let’s take a look at the stats.
The stats tell the story
The average price for all property types since 2020
The average price for all property types in Toronto has seen a steep decline since the peak in early 2022. Some have fared better than others though and the gap between properties for move-up buyers has shrunk.
- The condo apartment average price is down 14.5% from the peak
- The condo townhouse average price is down 15.5% from the peak
- The semi-detached average price is down 25.5% from the peak
- The detached average price is down 30.7% from the
The price difference for move-up buyers
The price difference between different types of properties has been shrinking for move-up buyers
- The average price difference between condos and condo towns has gone down from $192,612 to $116,803 (down 58.9%)
- The average price difference between condos and semis has gone down from $584,731 to $322,532 (down 44.8%)
- The average price difference between condos and detached has gone down from $1,252,680 to $774,953 (down 44.1%)
- The average price difference between condo towns and detached has gone down from $1,252,680 to $774,953 (down 44.1%)
- The average price difference between condo towns and semis has gone down from $1,097,811 to $658,150 (down 46.1%)
Looking for more updates on Toronto’s housing market? Check out these posts
- New Rules for Toronto real estate in 2023
- BoC rate hike looming? Will it affect Toronto’s housing market?
- February 2023 Toronto real estate market report
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Should you buy or sell first?
There is usually a right and wrong answer to this question and it all depends on what the market is like at the moment that you decide to move up.
Pros of selling first
- You can shop with confidence knowing exactly how much money you will have at your disposal.
- Less risk of having to carry two mortgages if the market shifts to a buyer’s market.
- Less risk of not being able to close your purchase if the market shifts to a buyer’s market.
Cons of selling first
- Higher risk of not being able to find the right house if the market heats up.
Pros of buying first
- There is no stress about finding a property on a strict timeline.
- You can take your time shopping for your dream home.
- No danger of you having to find a temporary place to live.
Cons of buying first
- There is always some level of uncertainty about what you will sell your property for.
- You automatically become a motivated seller and may have to settle for a lower-priced offer than you would otherwise.
This is written as of March 2023. Despite the low inventory levels at the moment, my advice is to sell first. The probability of not being able to find the right property is much slimmer than the probability of an increase in inventory as the spring approaches.
When is a good time of the year to make the move?
Everyone would like to try to time the market and sell at the peak while buying at the bottom. Unfortunately, it is impossible to plan for that. The chart shows the absorption rates for condos, condo towns, semis, and detached properties in Toronto since the beginning of 2018. The absorption rate or months of inventory (MOI for short) is deemed the most accurate way to pinpoint whether a market is in favour of sellers or buyers. Found by comparing home sales versus how many listings are currently on the market, MOI essentially asks the question: How long would it take for every single property to sell if no new homes were put up for sale? If the absorption rate is low, there is upward pressure on prices. If the absorption rate is high, there is downward pressure on prices.
As the chart below indicates, Toronto’s real estate market has been unpredictable and has thrown a wrench into historical real estate trends. Still selling at the beginning of spring while inventory is low and getting a longer closing that takes you into June and July would make sense, since supply is usually the highest in those two months. My suggestion is to stay in touch with current real estate trends from a trusted source long before you make a move. The media is usually months behind the current market or has a biased spin. A trusted and knowledgeable full-time realtor is your best source. If you have any questions about the real estate market, or if you are buying or selling real estate I would love to help. Please call, text, or email me. My phone number is 647-830-5210 and my email is firstname.lastname@example.org.
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