Buyer and Seller psychology is a funny thing and one of the more interesting aspects of this business. And I’m always touting old adages to clients in jest like, “The best time to buy real estate is always yesterday, and the best time to sell in never,” which is true to some extent, but somewhat impractical.
That said there are some others that I have found to ring true time and time again because of the disconnect between the reality of market dynamics and the ideology of market dynamics.
Pausing Your Plans
For instance, nobody ever buys at the bottom of the market and similarly very few ever sell at the top. These are both the ideal times to buy and sell respectively, but in reality, not many do. Now I know none of us have a crystal ball and there are no guarantees in life, but I can’t count how many people I’ve spoken to over the last decade that have decided to put their “search on hold” or “postpone their listing” to wait for better market conditions, only to have come to regret their decision.
When is the Best Time to Buy a Home?
For buyers, when the market is starting to soften and there’s a hint of some leverage, they almost always want to wait for more weakness. Nobody wants to catch a falling knife and even if that means paying more for a potential property when the market is on the way back up, buyers take more comfort in the fact that the market is moving in the right direction. The psychology take away for me here, is that people generally want to pay for comfort, even if it is subconscious.
Learn more about buying a home with these posts next:
- The Ultimate Guide to Buying Your First Home
- Do You Really Need a Buyer’s Agent?
- What Not to Do Before Buying a House
You can also read more about the best time to buy a home in Toronto right here.
When is the Best Time to Sell a Home?
And for Sellers, when the market is heating up and the conditions are ripe to entertain multiple offers, many wonder if they can get more money by holding on a little longer. This might have more to do with greed, but given the (tax free) stakes involved in selling your home, anyone can wonder if they could get more.
Get more home-selling insights with these posts next:
- Why Your Home Isn’t Selling
- How Much Work is it To Sell a Home in Toronto?
- Should I Renovate Before Selling?
How the Market Comes into Play
Now the real estate market is a market, like any other, so these observations are likely universal to all buyers and sellers in any market to some extent, but the big difference between real estate and stocks per se, is that we deal in buying and selling homes!
This is not a market built or intended for speculation and no one can stop the inevitable changes in life from happening. People need to buy and sell for a lot of different reasons besides investing, making money, or getting a deal, and often getting caught up in timing the market can have a real negative impact on both finances and lifestyle.
Beyond the normal annual cyclicality of the market; Spring, Sumer, Fall, Winter – I’m not suggesting anyone list their home for sale in the dog days of August or over the Christmas holiday – when it comes time to buy or sell a property, it’s exactly that time. Those that try and time the market perfectly, usually miss it, and often regret not moving on their own schedule rather than at the whim of the market.
Learn more about seasonality and the real estate market with these posts next:
What Can You Do?
For those buyers looking to get into the market for the first time, DO crunch the numbers and understand your financial situation, but when you find the right property for you, be ready to jump in. Yes, the market may dip after you’ve bought, but anyone I’ve dealt with that decided to pass on the perfect house just to wait for better market conditions has regretted it. You won’t find another one just like it, and the market is far fickler than people realize. If there is a dip, it doesn’t last long and can be easily missed. I can remember a few folks that started their search after the dip we saw in the middle in 2017, only to wait for further price reductions, and quickly get priced out after the market when it rebounded faster than expected.
Moving Up?
For those Buyers and Sellers already on the market and looking to move up, the timing of the market makes even less impact… except that you should do whatever you can to make sure you Buy and Sell in the same market and discuss with your agent which action to take first.
Is it better to buy first or sell first? Read more in our blog right here.
If the market is heading downward and there’s some decent inventory around, it might make sense to sell first. If the market is heating up and multiple offers are a regular occurrence, you must buy first in order to make sure you don’t end up homeless. But either way, if you buy and sell closely together, it shouldn’t matter too much what the macro market conditions look like. You may sell for less in a down market, but you’ve also bought (more) for less too. On the way up, you may have to pay that premium to beat out the competition on the buy side, but you’ll have more leverage when it comes time to sell too.
There are always going to be market risks and ups and downs in pricing, but long term the trend is always up, and since your home is a place you’ll reside in for decades to come, the smaller fluctuations rarely have an impact. So, when it’s really time to make the move up, down, or out, it’s probably the right time, and the first call you should make is to your agent to discuss the market dynamic and strategize on how to maximize your own utility within the transaction.
Do you have questions about the market? Reach out by calling 416.642.2660 or emailing admin@torontorealtygroup.com.
Want More Insights From TRG Experts?
Sign up here to receive Insights Magazine delivered to you. This resource is full of market advice and industry intuition from our team and colleagues to keep you up-to-speed on the ever-changing Toronto real estate market.
