Should You Wait Until Spring to Sell Your Home This Year?
In the doldrums of the post-holiday winter, anxious Canadian homeowners toss and turn in the night pondering if they should list now or wait until the warmth of spring. The usual Canadian consensus is that winter selling could mean long weeks waiting for an interested buyer, cold-lowball offers, and having to settle for something under asking price. However, this is a grim outlook. While this pessimism carried past the holidays would certainly make the Grinch or Scrouge proud, there are several reasons why a winter sale can work in your favour.
This winter, with strong selling conditions in many of the country’s major markets, the question isn’t should you wait until spring to sell your home, but rather, why wait?
Stuck at home = more buyers & more sales
We are now over two years into pandemic lockdowns and what feels like the 10th wave of restrictions. The Omicron variant is the new hot topic, and more variants continue to be discovered. Everything we’ve witnessed starting from the second spring lockdown, disrupted the notion of “home” across the country. Since then, markets have seen an explosion in demand. Hordes of buyers are in search of more space, aided by historically low borrowing rates. Even a new stress test implemented on June 1, 2021, could not slow the frenzy of sales. 1
National home sales jumped 9% month over month in October and 1% month over month in November 2021. November sales were strong historically, with the actual (not seasonally adjusted) number of transactions, dropping slightly 0.7% on a year-over-year basis, missing the 2020 record for that month by just a few hundred transactions. 2
Regions like Edmonton, Toronto, Calgary, and Winnipeg all posted year-over-year sales increases. The surge in demand is most evident in Calgary, where home sales increased by a substantial 47% in November, compared to the same time last year.3 On a year-to-date basis, 630,634 residential properties have traded hands via Canadian MLS® Systems between January and November 2021, far surpassing the annual record 552,423 sales for all of 2020. 4 The data speaks for itself. Demand is strong across the country, driving sales to historic highs.
High demand meets low supply
Inventory levels are at all-time lows in most major markets, but that’s precisely what’s putting sellers at a major advantage this winter. According to CREA, about two-thirds of Canadian markets were seller’s markets in November 2021 based on the sales-to-new-listings (STNL) ratio. November 2021 did see new listings rise more than sales, easing the average sales-to-new-listing ratio to 77% from 79.1% in October.
However, it's clear that with the STNL ratio far above the 54.9% long term average, we’ve still got ways to go to ease the supply shortages. Cliff Stevenson, Chair of CREA, seems to agree, as he said this about the second last month of 2021,
“(November) provided another month of evidence that the housing supply/demand. Even at what is traditionally the slow time of year for housing, conditions and price trends are at the same record levels we saw this spring. Things may calm down a bit through the balance of December and January, but next year’s spring market will no doubt be an interesting one.”
With access to a limited number of homes, strong sales have continued to deplete inventory levels across the country. November saw just 1.8 months of inventory left over on a national basis, tied with March 2021 for the lowest level ever recorded. 5
Sales are also happening faster than we’d expect for this time of year: in Alberta, our brokerage is seeing a high number of offers coming in ahead of the typically busy spring market, and in Ontario, we’re seeing many sellers accepting strong offers within a few days of listing.
More bang for your buck
Prices have abided with the law of supply and demand, going up under current conditions. In November, year over year price gains are in the mid- to high single digits in Alberta. In Manitoba, gains have risen. Ontario witnessed a massive 30% spike in year-over-year home prices as the GTA starts to pull its weight after a slow start to the pandemic.
The national average for a home increased by 19.6% in November 2021 compared to the same month last year. It’s important to note that excluding the Greater Vancouver area and the GTA from this equation cuts $158,000 from the national average price. 6 The FairSquare Group Realty team has processed many deals with multiple offers over asking price. Buyers continue to outbid each other to get their slice of the pie, and sellers have the firm upper hand.
With rising demand, limited supply, and strong price growth in many of Canada’s real estate markets, conditions don’t get much better than this for sellers. And, if 2021 taught us anything, it’s that there’s no telling what the future could bring. While each homeowner has their own unique set of circumstances to consider, many sellers are choosing to get in while they can this winter.
A side note for homebuyers looking to sell
Are you in the market to both sell and buy? A good strategy to consider is selling your home situated in a popular area and purchasing a home in a smaller, less major market. This tactic allows you to take advantage of the seller’s market while skipping the high-ticket purchase price of a home in the same area. Set on living in the same area? Then it might be time to consider a home with a lower purchase price than your current one. This gives you more flexibility, allowing you to put a larger down payment on your new home and secure a smaller mortgage.
Long story short: don’t wait to sell
When spring arrives, more sellers will be listing their homes which can lead to the market having more balanced conditions. Although this is good for the market overall, if you’re selling your home, it would be best to take advantage of the seller’s market we are in. The real estate market goes through ebbs and flows and if you can capitalize on your biggest investment, why wouldn’t you?
Spring has sprung early — don’t wait to sell!
Those who choose to sell with FairSquare Group Realty stand to gain even more from their winter sales. Your commission savings increase when home prices are high. And you’ll never have to compromise on service: your local REALTOR® will ensure that your home is priced right while keeping your family’s safety a top priority. We’ve got your buying needs covered, too: when you purchase a home with one of our REALTORS®, we’ll give you $2,000 in cash back!* That’s the future of real estate. Call 1-855-999-9740 to learn more.
1 Did the new Canadian Mortgage Stress Test Cool the Market? Early Indications
2 Canadian housing heating up again heading into 2022
3 FairSquare Group Realty – November State of the Market Report
4 CREA - Canadian housing heating up again heading into 2022
5 CREA - Canadian housing heating up again heading into 2022
6 CREA - Canadian housing heating up again heading into 2022