Welcome back, today, we're tackling a common question for homeowners: Seller's market vs. Buyer's market – what it means to deal with these markets. Whether you're thinking of selling or buying, understanding the market conditions can make a big difference. So, let us examine the key differences and how we should navigate them as a buyer or seller.
Move-Up Magic in a Slow Market
In a move-up scenario, homeowners upgrade to a larger or better property. Maybe you're a family in a townhouse moving to a semi-detached home, or a semi-detached family transitioning to a detached home. Or moving from a Single Garage Detached to a Double Garage home. Or moving from a high-rise condo to a freehold asset.
Understanding the Current Market
First, let's get a sense of where we are. Here's a graph showing yearly TRREB MLS sales for the past 13 years. As you can see, 2023 and 2022 were slow years with significantly lower sales volumes, specially when compared to 2011, which saw around 89,000 units sold. Cut to 2023 and we had only 65,884 sales in the GTA. This highlights the market's sluggishness, even after thirteen years worth of population growth and new subdivision developments, the quantum of sales reduced dramatically. Even in 2024, so far the first half saw only 36,586 transactions despite an interest rate cut announced in June, proving the slow nature of market. Two more cuts are likely this year, and up to four expected in 2025.
This slower market allows us to negotiate well for buyer clients, with properties generally available at credible prices. So, if you've been contemplating a move-up, this could be the perfect opportunity!
The Move-Up Advantage
In a move-up scenario, you're selling your current home and buying a better one in terms of location, size, specifications and lot. Yes, your existing home will sell at the current market price, which might be lower than a peak market. However, the property you're purchasing will likely be at a higher price point, offering greater potential for appreciation. Ultimately, the gains you make on the purchase will outweigh the discount you might give on the sale, since both transactions occur in the same slow market.
Downsizing vs. Move-Up
This logic doesn't apply to downsizing. In a downsizing scenario, you'd likely lose more on the sale of your larger home and gain less on the purchase of a smaller one due to the lower price point.
Benefits of Moving Up Now
The current market offers two key benefits for move-up buyers:
Price Saturation where Prices for larger properties are also saturated, minimizing the potential loss when selling your current home.
Inventory Choice with less competition, you have a wider selection of properties to find your perfect fit.
Selling First, Buying Second is Key
Now the questions comes when in a Move-Up scenario should I Buy First or Sell First. In a slow market, prioritize selling your current home first. Secure a sale with a longer closing to give yourself time to find your ideal move-up property. Once your sale is firm, you can confidently purchase your new, bigger home. Listing your current home while searching allows for continued viewings and potential offers. This strategy minimizes pressure and ensures a smooth move-up experience. You will be in the commanding position, to sell your home at a reasonable market price, and then negotiate well for the move-up.
Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate, and we will do our best to help.
Mudit Mehta
Broker of Record
ELIXIR REAL ESTATE INC.
Off: 416-816-6001 | [email protected]
