By Penelope Graham, Zoocasa
Special to the Financial Independence Hub
When it comes to nuggets of real estate wisdom, a persistent adage is that one should avoid selling in the winter at all costs: after all, bad weather, limited sunlight and poor driving conditions don’t inspire shoppers to peruse open houses.
But while it’s a fact that the winter housing market is a slower one — there were 25 per cent fewer sales in the Toronto real estate market in January 2017 compared to the previous May — having to list your home in the new year doesn’t necessarily mean compromising on your profits.
In fact, due to a few seasonal phenomena, listing your home for sale in January can translate to a higher sales price; here’s why.
Winter buyers are extra motivated
Just as January sellers are likely listing for a reason, early-winter buyers are also likely driven by a sense of urgency. In fact, a small but persistent bump in activity is typically seen in the weeks following New Year’s Day, as buyers who shelved their holiday home purchases jump back into the market.
January also tends to be a busy season for mortgage pre-approvals, especially for organized buyers seeking every advantage in preparation of the spring market. However, once these buyers have confirmed their maximum buying power, they may be tempted to take a preliminary look at what’s available now, including your listing.
“The fact is, if you’ve waited until spring to get a mortgage pre-approval, you’re already late, and there are a few real estate market factors that will work in your favour if you act now,” says Mike Bricknell, a mortgage broker at CanWise Financial.
“It is very beneficial to get your mortgage pre-approval when the housing market is quieter, especially as there have been many recent industry changes that may have affected what you can afford.”
Low supply means higher prices