Timing the market is an art. To understand this, you need to realize there are multiple markets in our real estate market. Condos in Toronto can be appreciating, while detached homes in Oakville are coming down in price. The only way to benefit from timing the market, is to be selling in one market and buying into a different market. If you’re selling a 3 bedroom home in Burlington and buying a 4 bedroom home in Burlington, you’re buying and selling in the same market, so you can’t substantially benefit from timing the market.
Only a Realtor working in your best interest can help you time the market.
If you’re selling your condo apartment and moving to a detached home, there will be times when the move makes more financial sense. Sometimes the market flips, and it makes more sense to sell your detached home to buy a condo. However, it’s tough to predict the market, just like it’s tough to predict when cherry blossom trees will bloom. We know roughly when the markets change, but can’t tell for sure until we are on the cusp of a market change.
Today, February 27, is a fantastic time to sell a condo and buy a detached home. Condo prices are up and detached home prices are down. Condo owners have held off on buying their next home because they are waiting to see the effects of the mortgage stress test, the interest rate hikes and the foreign buyer’s tax. Because they aren’t buying, inventory of detached homes swelled and prices came down. Also, since the condo owners were not selling, condo inventory dried up and condo prices rose.
If we receive no more interest rate hikes, or legislation changes, house prices will rebound as homeowners find their feet in the second half of 2018.
It’s Not All About Timing The Market; Homeownership Is A Long-Term Investment
Remember the reasons you’re buying a home. To have financial security, as well as a place to call home. Think of your primary residence as a long-term investment. No matter what, it’s going to be one of you best-performing investments. Unlike the stock market, you can live in this investment, and its value can never hit $0. After 25 years, you’ve paid off your mortgage and your home has probably appreciated considerable. Even if there were cycles in the market where prices dropped and rose, it will still appreciate at a reasonable rate over 25 years. At the same time, you would have paid off your mortgage.
Even if you only plan on staying in your next home for 5 years, you would have paid off a fair chunk of your mortgage, and your home would have probably also appreciated. Leaving you with plenty of equity to move up to your next home.
If you want advice on whether now is a good time to buy or sell, contact us.