You’d think that there were less people looking to make any kind of a move in real estate now versus a year ago, or two years ago, and that therefore there would be significantly fewer listings on the market. Theoretically it makes sense but the truth is different. In fact, there are at least as many homes for sale, if not more. Why? The good reason has to do with families recognizing the opportunity to move to a large home and taking advantage of it. The bad reason is panic. Many people have been driven by panic to list their home now, fearing that as the months go on the situation will only get worse.
While that question is best suited for a discussion all its own, I do want to shed some light on the recent reports that January 2009 has seen less than half the action that January 2008 saw. Let’s not forget the inception of the Toronto Land Transfer Tax which, in hindsight, couldn’t have come at a worse time for our market, in many ways. The tax that effectively doubled the LTT closing cost on any home in the 416 area code kicked in on Feb. 1, 2008. Needless to say that much of January 2008 was also driven by panic, but with a very different result.
For those of us listing our condos and houses, I will tell you that panic is rarely a good reason to do anything, and rarer still does panic ever breed logic. Many people believe that the window to sell at the least significant loss possible is quickly shrinking as 2009 marches on. In my opinion the real estate market will show signs towards stabilization rather than deterioration. Again, the reasons why should be discussed on their own but suffice it to say that the true strength of Toronto’s real estate market lies in the fact that it had a lot higher to fly even before these troubling times. That’s what separates our market from the rest, in an unique and important way.
Having said all that, there remain many who are listing their homes, be it for good reasons or not so good ones. So if you’re one of them, hopefully the following will help shed some light on this difficult decision.
One of the most significant points of struggle is the initial list price. Weighing pricing too high and risking a property that never sells versus pricing too low and losing thousands of dollars. The price needs to be low enough that the property attracts interest and stands out in the minds of buyers, yet high enough that you’re not setting yourself up poorly for negotiation time. The 101 considerations may be beyond this scope but competing listings are crucial to understand. You need to know, and see, what buyers looking at your property are comparing it to. Competition, in a large way, will determine where your house or condo falls.
Moving fast or slow also has many considerations but, again, the competition factor plays an integral role. For instance, if you find your condo is worth $275,000 the last thing you want is the chump upstairs, with the identical unit, listing theirs for $260,000 while yours is still on the market! While the actions of others are, of course, out of your hands, there are certainly ways to mitigate the risks, control the competition to an extent, and give yourself the best possible selling scenario. For instance, if a competing listing just sold for a very attractive price, get yours up as quickly as possible, and with an attractive, yet fair, price.
