There’s this myth that seems to crop up around this time of year, every year: Neighbour Bob tells homeowner Carrie that the hot summer market has passed and the bubble is bursting. Carrie — who was prepared to sell — now feels she must wait until next year if she’s to get a good price for her home. She has panicked. Neighbor Bob, continuing his rounds, then tells Matt, Mary and Tess — who are all looking to buy — that they should wait until winter when the market is cooler and steals are readily available.
I’ve said it before and I’ll say it again — the best time to buy or sell is when you’re ready to buy or sell, whether that means your guests will wear mittens to your housewarming or sunglasses. Winter doesn’t necessarily mean a great deal, and summer doesn’t necessarily mean a great return.
Neighbour Bob needs a reality check on the whole bubble thing as well. Sales during the first half of August were up three per cent from last year’s record year; 2006 is set to surpass even 2005’s staggering numbers. Bubbles only occur, and burst, when people are spending more money than they have. The reality of our fair city is that, relatively and generally, Torontonians have the money to buy real estate.
With CMHC recently making it even more affordable, an increasing number of buyers is arising. As well, Toronto, as a world-class city, is still leagues below places like California, New York and Vancouver in terms of real estate values. In my estimation, panicking about our real estate market is premature and unfounded.
It’s important to understand that while differences exist between the spring/summer and winter markets, they shouldn’t necessarily determine when to buy or sell.
For example, if there are three other homes listed on your street in July, it may be best to wait until September. On the other hand, if February shows virtually no competition for your prime property, you may choose to be the first to “cash in.” If you’re sure to get a significant raise in September, it probably doesn’t make sense for you to buy in July. If you know exactly what you’re looking for, maybe when you buy depends solely on when that specific type of property becomes available.
The truth is that your particular situation is like your fingerprint — different from everyone else’s — and ideally the ultimate deciding factor in when you buy or sell. Let Neighbour Bob say what he wants. Educate yourself and Bob will be coming to you for advice.