Question: I've always heard that buying a home in the off-peak season – like close to Christmas – is one way to get a good deal. But I've also heard there are not as many homes to choose from, or that what's still on the market in December is just the dregs that couldn't sell earlier. Should I hold off my purchase until the snow flies?
Answer: First things first: I personally don't believe there are "deals" out there. The market is quite savvy, and there are many others that are thinking in terms of getting a deal. People with deep-pockets are waiting on the sidelines looking to snatch up undervalued properties. Exposure to the open market also tends to reveal the true market value of a home.
My advice for anyone looking to purchase a home is to make your decision based your personal needs and wants. If you have a bargain shopper's mentality, you will likely have regrets down the road.
Buying a home isn't like buying a computer, television or car - where you know exactly what you want and are simply looking for the best price. Homes are not so cut and dried - there are huge variations based on location, condition and other factors.
As for timing, it is true that you may have some added negotiation power in December and January. Homes on the market during this time have usually been on the market for a prolonged period. A seller may be more willing to negotiate - they may be fed up or desperate to sell by this point. But if no one else wanted it, why would you?
Let me illustrate this point with some compelling figures. In December 2012, there were 13,241 active listings in the Greater Toronto Area. Of those, only 4,295 were newly listed in December. That means, 68 per cent of active listings have been on the market for at least a month. If we now look at those some statistics for May 2012, we see a very different story. There were 20,462 active listings in May, and of those 19,177 were new listings. That is 94 per cent fresh listings – a very different picture! (Source: Toronto Real Estate Board Market Watch)
Waiting until spring will clearly give you more choice - and more competition. The extra competition could cost you a few thousand dollars more, but the larger inventory may just contain your "ideal" home.
Why not compromise and blend both approaches? Start looking during the off-season, with managed expectations of your outcome. If you don't find your home, then continue your search into the spring market. Yes, this means more work on your part – but it will be well worth it in the end.
Ricky Chadha is a broker with Royal LePage Estate Realty in Toronto, and specializes in applying social media and other digital tools to the business of real estate. You can find Ricky on Twitter @your416 or at his website RickyChadha.com.
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