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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
There’s just one problem for this crop of early-year buyers; because few sellers opt to list over the holidays, there’s often not much to choose from. That supply and demand imbalance then puts upward pressure on prices, meaning homes listed for sale in January often go for more than their December counterparts.
For example, those who sold their GTA homes in January 2017 received on average $40,273 more for their home than those who sold before the holidays, according to the Toronto Real Estate Board.
As well, 2018 sellers may be in for a robust start to the year, if fall activity is any indication – for example, the Toronto real estate board reveals that while sales of Toronto townhouses, condos and detached homes usually detracts 13 – 24 per cent between October and November, this year bucked the five-year trend with a 4-per-cent increase in activity, which could very well carry into the new year; and that may put even greater pressure on available homes for sale.
More individualized attention
While real estate listing agents are always sworn to a fiduciary duty to best serve your interests, they may be juggling several deals on the go during peak season. In January, however, they’ll likely have all the time in the world to market your home to the best of their ability.
Sellers can take even greater advantage of more eyes on their winter listing by investing in professional staging services, or a few small-scale renovations such as new floors, fresh paint, and updated fixtures. After all, with fewer buyers in the mix, it’s all the more important to make your listing stand out.
Penelope Graham is the Managing Editor of Zoocasa.com, a leading real estate resource that uses full brokerage service and online tools to empower Canadians to buy or sell their home faster, easier, and more successfully.
