The Canadian news cycle is full of articles about the housing market these days. With rising interest rates and prices going down, many sellers might feel worried that they missed the “peak” of the market in February 2022.
As a result, some sellers are trying to decide between several options. Should they wait to sell and stay where they are? Should they sell anyways despite the changing market? Or should they lease their homes instead of sellin themg?
In this post, we’re going to look at the pros and cons of each option, so if you’re on the fence about selling your home right now, this article is for you.
Should You Wait Out the Market?
If you are able, waiting out the market might seem like a good idea. But is it really? What’s important to note is that no one actually knows where the bottom of the market is, that is, until it starts to shift again. Yes, in general, home values always tend to trend upwards in the long term, but how long are you willing to wait?
The sellers who sold their homes in February and March had no idea that the market would start to turn, it was just an educated guess that led them to sell at that moment.
Additionally, real estate is different from other types of investments, especially if you are living in the home you want to sell.
You might be motivated to sell for many different reasons, such as a change of job, a growing family, the need to downsize, and the list goes on. These reasons are not strictly financial and should absolutely play into your decision to sell your home.
If you’re thinking about selling your home this year, it’s best to work with an experienced agent. Here are a few blog resources to help you choose the right agent for you:
Is it Better to Lease Your Home?
With rising interest rates there typically comes a pattern. Higher rates often equal higher rents. When interest rates rise, it becomes harder for first-time buyers to qualify for a mortgage, and as a result, the rental market begins to swell. Buyers who would get qualified in a low-interest climate get priced out of the market and become renters.
Additionally, rising interest rates also lead to higher mortgage payments in some cases, which causes the cost of rent to also go up.
Looking at the market, it’s actually a great time to be a new real estate investor. And leasing your home instead of selling it would provide many benefits such as:
- Someone else paying off your mortgage and building your equity
- Monthly cashflow through rental payments
- Building wealth and holding on to an asset rather than letting it go
However, there are certainly some caveats to being a real estate investor. Some things to consider include:
- Are you ready to be a landlord and take care of all the added responsibilities attached to owning an investment property?
- Is your current home amenable to renting? (For example, some condo boards do not allow rentals or your home might not be located in a sought-after location for rentals, etc.)
- Did you need to rely on the capital from your home sale to finance the purchase of a new home?
Can You Really Sell in This Market?
If you’ve been keeping up with the news, you’ll know that as of recently, home prices in Toronto have dropped about 20% since the market peak in February 2022. That is a significant dip, however, it’s still important to note that year-over-year prices are still slightly up.
Selling your home in a changing market is still a good idea, although you will need to adjust your expectations. For example, the average number of days on market has gone up, meaning that your home will likely stay on the market for longer than it would at the peak of the market.
Multiple offers and bidding wars are also less common now, and many buyers are including conditions in their offers.
Are you wondering what it’s like to sell your home in Toronto? Here are a few resources to help:
- How Long Will it Take to Sell My Home in 2022?
- Why You Should Never Skip Out on Staging
- Should You Renovate Your Home Before Selling?
Don’t Wait, Just Work with the Right Agent
Instead of waiting out the market, a better strategy would be to work with an experienced real estate agent who has worked in these types of markets before. Someone with years of experience can help you maximize your home sale in any type of market, not just a strong seller’s market like we have recently seen.
Do you have questions about the current real estate market in Toronto? Feel free to reach out and call us at 416-587-3300 or email us at office@torontoism.com.
