For Toronto house hunters who feel their resolve wilting in the July heat, Geoffrey Grace has some advice: Don’t give up now.
Mr. Grace, an agent with ReMax Hallmark Realty Ltd., has run the numbers over the past four years and found that the average price of a home in Toronto is 5 per cent higher in September than in August.
Listings may be thinner in July and August, he says, but buyers are almost certain to find it easier to prevail for the obvious reasons – so many of their competitors are diverted. “This could be the last little stretch of 60 days before prices go up again in the fall.”
This week, the Bank of Canada lowered a key lending rate 25 basis points to 0.50 per cent. Market watchers fear the decision may encourage Canadians to borrow more heavily for homes and other purchases, but economists say it likely won’t ignite the housing market the way the central bank’s surprise cut in January did because this week’s move was highly anticipated.
I wrote about Mr. Grace’s number-crunching last January when he reported that a buyer could end up paying $107,000 more in May for the average detached house in the 416 compared with the average price at the end of December.
Comparing the market’s spring performance with his estimate, we found the result was even more dramatic than Mr. Grace had anticipated.
The average price of a de-tached house in the 416 reached an eye-popping $1,115,120 in May. That compares with an average of $934,039 last December – for a jump of $181,081, or 19.4 per cent.
As for sellers, Mr. Grace is also coaching his clients to wait until September to put their houses on the market.
One homeowner has accepted a job in the United States and will be moving south at the end of July.
“Based on the math I have explained, he has decided to leave his house empty for August and let me list it in September,” he says.
Mr. Grace acknowledges that buyers and sellers have to make their real estate moves fit their life circumstances. “I’m not advocating rushing out and buying a property if it doesn’t meet your needs just because it’s August.”
But he advises prospective buyers not to let their attention falter if they can help it.
Already this month, agents are reporting that bidding wars are more sporadic.
A couple of weeks ago a house in the Beaches was listed with an asking price in the $900,000 range, received eight offers and sold for $300,000 above asking, he says.
But Mr. Grace had an offer night on a listing of his own pass recently without a single bid.
The house had an asking price of $849,000, which is in the price range that generally attracts rival buyers, but Mr. Grace figures they may have bumped up too closely against the Canada Day holiday. Prepping and decluttering had taken a long time, he says, and he didn’t want the sellers to delay any longer.
But while the offer date passed without a deal, two bidders were vying for the house a week later.
Mr. Grace says August tends to be less hectic, as well. “I think people just shut down.”
Families are out of the house a lot more – taking the kids to the park or the pool or cycling the trails, for example – so they don’t even think of putting out a “for sale” sign.
In September, they’re spending more time inside and getting back to a routine. “In the fall they start to notice [the house] is a little bit too small and they’re on top of each other.”Report Typo/Error