We get asked this question a lot. The answer is a lot simpler than you might be expecting.
Everyday I see articles in the big papers about real estate. The newspapers job is to get people to read their articles. More eyes on their articles, the more they can charge for advertising. So they like to make their headlines as dramatic as possible to attract viewers. The real estate topic is always of interest, even more so if you are thinking of selling or buying. The articles opinions are usually heavy to one side. Either it is saying the housing market is in a giant bubble that is about to burst or that there is no bubble and everything is as expected. So which is it? Only time will tell but in my opinion, prices are set to continue to rise for the next year at least and no bubble will ever be bursting.
In the recent election, the liberals and conservative parties had different approaches to how they would approach the housing problem in Ontario. There is no doubt that the price of homes is out of control. Many people will never be able to afford a home on their own now and the pricing is just continuing to go up and up. The Liberal plan had a focus on banning blind bidding and introducing an auction system. Honestly I don’t think that will fix anything except maybe save some buyers from overspending. In my experience, the current competition model is not seeing many buyers bid dramatically over the next highest bidder. Buyers know what their limit is and what the house is worth from advice given by their realtors. Seeing what the current highest bid is might actually result in buyers bidding over what they were comfortable stopping at in the blind model.
The real problem is the lack of inventory. There aren’t enough homes for sale. Everybody is staying put, settling into their homes where they all now work from as well as live in. Uprooting to pursue new jobs is not as necessary as before as many jobs can be done remotely. And generally speaking, people do not like to upgrade to a larger home in times of uncertainty.
So when is the best time to sell? That depends on where and when you are going. If you are selling to buy and move into another home, the answer is always going to be now. There is no reason to wait. In fact, with the current conditions, you will have no problem selling your home. The challenge will be finding the new one. Best to find the new one first and then put yours up for sale, knowing that it will also sell quickly. Price isn’t much of a factor as the change amount is more or less the same now as it will be in the future. Your current home will adjust with the market as will the destination home.
If you are looking to sell and move away or not move into another home, then I would also recommend to sell now. The market can turn at any moment. Right now it is a strong seller’s market still with lots of buyers and few sellers. Come spring, there will be more sellers and possibly less buyers. Interest rates will be rising and home prices have already priced many out of the market. Selling in the winter with less on the market can also make your place more desirable. Especially if your home has some challenges that buyers might not be as willing to live with if there are other options on the market to choose from.
If you are not in a rush to sell and can wait 6 months or more before you are ready to seriously think about selling, then by all means wait it out. Home prices historically have only risen about 3% per year. It is only in the past year and a bit that we have seen gigantic gains. What we haven’t seen in a long time are losses. Home prices did not drop when the pandemic hit, mostly due to the financial support given out by the government. If they didn’t drop then, then I doubt there is anything that will make them drop in the near future. Outside of natural disasters, man-made disasters or an alien invasion, which you can never predict when one might occur, it is unlikely that your home will lose any value anytime soon.
So, in short, if you are ready now, then now is as good a time as any to get your home on the market and take advantage of the conditions now before they shift and even out. That will happen! It always has and will again level out. We just don’t know when.