How does one know whether it’s the right time to buy or sell?
Full disclosure, my response below certainly does not fall into the classification of “short,” but I believe it is well worth the read.
Even though I’m in real estate, I’m not impervious to real estate marketing from other agents. Last year I received flyers on my doorstep indicating that it’s a great time to buy while others stated it’s a great time to sell. This year I’ve received a flyer indicating that it’s a great time to sell while another indicated that it’s a great time to buy. With so many different opinions from so many different sources, it’s difficult to know what to believe. So, is now the right time to buy or sell? Let me park that question for a second after I’ve provided a little context.
It’s funny the difference a year can make and this sentiment certainly holds true in real estate. Last year at this time, buyers were firmly in the driver’s seat. Housing prices were dropping and inventory levels and days on market averages were piling up. Buyers were able to view a property multiple times, negotiate from a position of strength, include an abundance of subjects including that of inspection, sale, and others with confidence in knowing that sellers, some out of circumstantial desperation were willing to adjust even their floor price (the lowest price they’d originally been willing to accept) to achieve a firm sale. With interest rates at this time being incredibly low historically speaking, it was, on paper, an opportune time for first time buyers to step into the market and for savvy investors to shrewdly scoop up property while the majority of the population waited for prices to hit the bottom (which, by the way, can’t possibly be known until the market is already on the way back up). If you’re reading this and feeling like “whoops I was playing the waiting game” and may have missed a great opportunity, read on.
Flash forward to this year where inventory levels have dried up, interest rates remain low, and buyer demand has seemingly increased. Buyers are now seeing, for the first time in nearly two years, some sellers setting presentation of offer dates. What does this mean? This means that a seller has directed their agent not to present any offers to him or her until a certain date. Well, why do this? Holding offers until a specific presentation date may give rise to a competitive multiple offer situation and a potentially higher sale price for the seller. And, as always, let’s be honest: what seller would not want as much money as he or she could get for their property? If this news peeks your interest and you’re now thinking “wow should I be selling,” not so fast, read on.
Based on the above context, one may assume that clearly 2019 was the right time to buy and 2020 is looking like the right time to sell, correct? And this is where we begin to un-park that earlier question: is now the right time to buy or sell? The answer is annoyingly simple and yet quite complex. The answer is (drumroll please) “it depends.”
Now, before you throw your phone or computer, let me explain.
Market conditions, such as the ones shared above, certainly create more favourable conditions for buyers or sellers depending on their objectives, but these conditions do not factor in personal circumstances. For example, if you were entering the market as a first time buyer, most of 2019 represented a wonderful opportunity for you. However, if you lacked the necessary funds for a down payment, or you’d just started a new job, or were entering or exiting a relationship, etc… your personal circumstances may have been such that it was an inopportune time to make a move. Conversely, if you are someone who is exiting the market to re-locate elsewhere, market conditions are currently more favourable to you as a seller, but just like the buying scenario, there could be a variety of personal circumstances that give you pause.
So, market conditions, while an important consideration for those entering or exiting the market, it is not the only nor is it the most important factor in many cases.
What if you’re someone who is currently in the market and have plans to move up or down the property ladder; is now the right time for those people to buy or sell?
To answer this question, I’d like to share with you a little story…
The first property I ever personally purchased was a 1 bedroom condo between Oak and Granville Street in Vancouver West. I was in my twenties. I had no children. I enjoyed the Vancouver amenities and lifestyle: the seawall, the food, and the entertainment. And I’m quite certain that I had family and friends that enjoyed me having a condo in that location as well. This certainty stems from the fact that I’d never been more popular in terms of people coming through town needing a place to stay.
After a few years I grew tired of the commute, desired a slower pace, and wanted a space that would better accommodate kids because that’s the direction things were headed, so I sold my condo and purchased a 2 bedroom townhouse in Clayton Heights. In case you’re curious, I suddenly became less popular and had far fewer requests to stay.
As the number of children in my life grew to 4, so did the need for more and more space. The desire to be close to Vancouver’s food and entertainment was replaced by the need to be close to parks, rec centers, and schools and the two-door car was replaced by a minivan.
Life moved along for me and I needed to move along with it. What was I going to do – stay put in my 1 bedroom condo and say to 4 kids, “hey I know we’re a bit cramped in here fellas and I can afford to move, but I’m waiting for the market to be exactly what I want it to be, so just stop growing and hang tight.”
Playing the wait game was not what I considered to the best decision, so I moved, and moved again.
For anyone who is in the market currently, it is important to recognize that neither you nor I can control market conditions, and market conditions will never be ideal.
Market conditions were to a large degree irrelevant in my decisions to buy or sell because from a needs perspective I needed more space and from a price perspective, the market is largely relative meaning that if you sell at a higher price you will likely buy at a higher price and if you sell at a lower price you will likely buy at a lower price.
So, if you are upsizing or downsizing what is more critical to consider is not whether market conditions are more favourable to buyers or sellers, but instead focus on your own personal needs.
Market conditions became relevant to me once I decided to move. Let me repeat this for emphasis. Market conditions became relevant to me once I decided to move. For example, now that I’ve decided to move are market conditions such that I should sell first and buy second, or that I buy first and sell second – each of which has their own pros and cons and risks and rewards. Another more critical consideration after the decision to buy or sell has been made is how market conditions will impact the marketing of the property because how a property is positioned in the market can be critical depending on conditions. I would suggest to sellers to market very differently in a buyer’s market versus a seller’s market, or balanced market.
So, putting market conditions aside for a minute, it may be worthwhile to simply ask yourself two questions:
- Am I happy living where I am?
- Is my current home meeting my needs?
If the answer to these questions is yes, then barring some unforeseen changes, you’re likely not going anywhere any time soon. But if the answer to these questions is no, then what?
If you’d like to explore the answer to that question a little bit further, click this link: https://caseyduncan.ca/contact-us/.
Now before you come up with a plethora of reasons why you shouldn’t connect with me such as you don’t have the time, or yadda yadda…, instead think of what could be gained. A conversation now, even if a move is not in your immediate future, will provide clearer insight into the steps you can take to better position yourself to meet your objectives when you decide it is the right time to make a move. It will also affirm whether or not I am someone that you’d be interested in connecting with regarding real estate related matters in the future. I’m quite confident that there will be value for you in that conversation.
So, go ahead and click that link. Let’s get together, face to face, for a casual conversation in which we can partner to chat about your objectives, explore different options available to you, and strategize a short or long range plan for you to meet those objectives in the most efficient, enjoyable and rewarding way possible. No obligation. No commitment. Just valuable conversation and a free coffee or lunch. My treat.
By the way, thanks for reading this response all the way through to the end. I said, it’d be worth it and I meant it: be one of the first 3 people to email me with the subject line “my treat” to receive a $5 DQ gift card in the mail.