Many clients ask us when the perfect time is to sell a home. It is an important question to consider, as the prices for comparable homes can differ in the tens of thousands of dollars, depending on when they sell.
The activity in your neighbourhood and street as well as changes in the world we live in play a crucial role in when the best time to sell is, but there are some general trends on sale prices during different months of the year. It doesn’t mean you have to sell based on what these trends tell us, what it is information worth knowing.
Below are two charts (showing data up to February 2021) from the Toronto Real Estate Board that are very useful in observing the trend.
Number of Sales
The highest number of sales takes place in late spring, in either April, May or June. The lowest in December or January.
As indicator of how unusual 2020 was, is that the highest number of sales was basically a tie between September and July. September is not unusual but so many sales taking place in July, traditionally the start of the summer slowdown, is very unusual. Similarly, we saw the lowest number of sales in 2020 in April, traditionally a very busy time for sales.
The highest average price typically takes place in fall, often October. The lowest average price is for homes that sell in January.
Last year was again unusual in terms of prices in that while October was the highest average price, July to December didn’t show much variation. April 2020 was actually the lowest price month on average, as the market reacted to the COVID-19 pandemic.
It is interesting to note that over the past three years, we’ve seen the best time to sell (in terms of highest average sale price for the year) flip from the spring (April and May) to the fall (October).
While 2020 was an atypical year in many regards, we have seen an overall shift away from pronounced differences in activity and price that follows the seasons. If you’re considering selling, we would advise you to focus more on local considerations and overall market factors rather than a specific time of year.
Real estate is all about location and what will happen in your neighbourhood is heavily influenced by what has happened in your neighbourhood.
- When does your street and neighbourhood look its best? This can include mature, leafy trees that hide a decrepit building, or the quiet, relaxed feel that you get to enjoy one month a year in your otherwise hectic neighbourhood. Major planned city work on curbs or water pipes is also not going to do your sale price any favours. A good realtor talks with you to determine when and how your home will show at its best.
- What are comparable homes on the street and in the neighbourhood selling for? Buyers are heavily influenced by what someone else paid nearby for a similar home. If your neighbour down the street ran into financial difficulties and had to sell the house quick, the fire-sale price they accepted is not what you want as a comparable when you list your home the week after. A good realtor times your sale to maximize the positive comparables.
- What is the perceived state of the real estate market? The media is very fond of taking conditional predictions and turning them into absolute statements for their headlines. If the media coverage of real estate in your area is focused on the negative, it will deter some buyers from looking and it will deter some sellers from listing. A good realtor keeps up to speed on the public impression of the real estate market to time (and market) your listing accordingly.
- What events or changes are taking place politically, environmentally, socially or technologically that will impact the market? We saw a huge example of this in 2020 when the COVID-19 pandemic occurred, with a temporary slow down followed by huge volume and rocketing sale prices. Regulatory changes can also have a major impact on the real estate market. A good example is the changes to the mortgage rules in 2012. On June 21, 2012, the changes were announced and on July 9, 2012, the changes came into effect. The highest month for sales took place in May and dropped to almost half by September. In terms of average sale price, the highest in 2012 was reached in April during the spring market and it dropped by almost $40,000 by July. We saw similar results from the spring 2017 introduction of the Ontario Fair Housing Plan and it is a good bet that any regulatory changes put in place due to COVID related concerns will have a similar impact. A good realtor keeps aware of what is going on that will have an impact on the housing market and advises you accordingly.
Timing the market is a very difficult thing to do and in recent years, it has become even harder. If you’re considering selling, you need to first and foremost focus on what works for you and your family. Once you’ve got that clear and you’re ready to discuss other considerations, get in touch.