Should I Sell My Home?

The biggest question right now in the housing market is should I sell my house and is it going to CRASH! With home prices increasing every week across Canada including Simcoe County but especially in the city of Barrie the real estate market is on fire since the end of the first wave of the pandemic in Canada. In this article, we will be discussing the pros and cons of selling your home right now.

What is causing this market to be on fire?

Before we begin we need to understand why the real estate market is on fire because that is critical in your decision to sell. One thing you need to understand is that this real estate market has multiple outliers causing this seller’s market. So let’s dive deep into it:

1. Canada can’t build homes fast enough with millennials coming into the real estate market. The classic supply and demand are causing this seller’s market to explode. Every Buyer’s agent says they have tons of buyers but low housing inventory. That is why sellers are getting their asking price for their homes. Unfortunately, this current housing market isn’t going to change in the next number of years.
2. Mortgage rates are at the lowest and buyers are taking advantage of that. As an example, right now you can get a mortgage for less than three percent which is almost unheard of making buying it more affordable.
3. The population of Canada is exploding with first-generation Canadians which continues to grow potential buyers in the coming years and Millenials are now also in the market and they are the biggest demographic since the Baby Boomers.
4. Real estate agents are seeing that investors’ ownership of homes in this country is at an all-time high and foreign buyers are playing a major role in making Canadian homes more valuable especially in cities like Toronto, Vancouver, Montreal and now Barrie with people migrating from these mega-cities to our city.

Will the Canadian housing market crash?

The billion-dollar question is that the real estate market going to crash and should I sell my home? Ask any real estate agent and they will say that they checked e-Bay and Amazon for crystal balls and they’re all sold out.

The chance of the market correcting is high but the market bouncing back is high as well. If you are thinking of selling your home this should not be the reason to sell.

The simple reality is that Canadians need homes and with new immigrants coming into our country and Millenials living in shared basement suites or sharing a house, we will continue to see more people wanting homes but unfortunately, we can’t build them quickly enough.

Unfortunately, we don’t know if or when the market is going to correct or even crash. If you are thinking of selling talk to your real estate agent and they will provide you with the current market data, what other homes in your area have sold for recently? What is affordable housing like where you live? How much does it cost to rent a home nearby etc.?

Make a Strategic Plan before Selling!

The best way to protect yourself when going to sell is to bring in the real estate professionals and consult with them regarding the next steps. Talk to the following:

1. Real Estate Professional – To go over current market trends and get an idea of what top dollar you can get for your property. Review closing costs and see if the low inventory is trending upwards is still staying the same.
2. Mortgage Broker – To review mortgage rates and trends with interest rates and what we should be seeing in the near future if mortgage rates rise. How much purchasing power do you have for the next house.
3. Financial Advisor – If you have access to a financial planner should I sell my house should speak to them about their thoughts on the market and if they should be preparing for any other changes that should happen. For example, should I sell my house because of bankruptcy or loss of job, etc.?
4. Real Estate Attorney – Sit down with your lawyer to discuss what you should be preparing for the move legally.

One part of your strategic plan should have a plan B for a place to live. What if you do sell and the closing day comes but you don’t have a place to live. Look at family, friends, short-term rental units, or even Air B&B’s for a plan B.

Will Mortgage Rates Increase?

The simple reality is that the mortgage rates have been on the rise….quietly by the banks! We have been seeing the fixed-rate mortgages rates have been slowly creeping up the past couple of months by the major banks. With inflationary worries that we started to see in early 2021 and now seeing 4% inflation numbers across the board with the cost of living the Bank of Canada is now to speak about an interest rate hike. When and how much is an unknown.

This should not be the reason to sell should I sell my house. As mentioned, if you are thinking of selling talk to your real estate agent or your mortgage broker and review what is happening with mortgage rates on a regular basis so that you can make an informed decision on when it’s right for you.

What is your motivation to sell?

Any realtor will tell you that the biggest motivators are usually not the best because it is usually because of divorce, death, disease, or debt (this is called the 4 D’s). If you have the house paid off and want to downsize and take some equity of the home and you could financially make that move, then do it. If you have a growing family or need to locate and can financially handle the move, then do it.

If you are looking to sell should I sell my house because of the market, have your real estate agent run a comparative analysis of home sales in your area to see the asking price for homes and how long it takes. Don’t forget to ask them about new home construction and if people are building more condos or single-family homes?

In other words, don’t put yourself further into debt especially if you have a family with kids.

Should I Sell First or Buy First?

A lot of clients are stressed about selling their homes. In a Seller’s market, you are in the driver’s seat, but when you are the buyer you are not. The focus has to be on the buying side as well.

Here are some factors that you should take into account:

1. Can you bridge finance which is being to hold onto two mortgages at one time? If you can, then buying first is in your wheelhouse of choices. If you can’t, then it is in your best interest in selling first with a longer closing date which will give you a buffer of time to purchase.
2. When you sell first just strategize with your realtor to make it a longer closing date to give you time to buy your next home. This will give you time to search for your next home.
3. Traditionally, inventory levels are higher during the spring market (March to late June) and the fall market (mid-September to November). This gives you greater choice on inventory, even though inventory levels are historically low.
4. When you sell your home first, one advantage is that you can put your main focus on the house hunt. Plus, money in your pocket is stronger than money in the house.

The reason people want to buy first is that they feel like they’re taking a chance on selling first and not finding a home to live in when their home closes. As long as your realtor has strategies against other potential buyers and is coaching you properly on how to win in bidding wars or putting in pre-emptive offers in early.