Ricky Chadha – The Globe and Mail

Question: I’ve always heard that buying a home in the off-peak season – like close to Christmas – is one way to get a good deal. But I’ve also heard there are not as many homes to choose from, or that what’s still on the market in December is just the dregs that couldn’t sell earlier. Should I hold off my purchase until the snow flies?

Answer: First things first: I personally don’t believe there are “deals” out there. The market is quite savvy, and there are many others that are thinking in terms of getting a deal. People with deep-pockets are waiting on the sidelines looking to snatch up undervalued properties. Exposure to the open market also tends to reveal the true market value of a home.

Comment: Then you don’t know what you are talking about. Prices over the holidays tend to be 10-15% lower than the peak in April-May. So of course there are deals to be had. But you have to time it right. Maybe not properties being sold for less than they are worth, that simply does not happen. But as the average price trends down, it makes a lot of sense to look to buy.

My advice for anyone looking to purchase a home is to make your decision based your personal needs and wants. If you have a bargain shopper’s mentality, you will likely have regrets down the road.

Buying a home isn’t like buying a computer, television or car – where you know exactly what you want and are simply looking for the best price. Homes are not so cut and dried – there are huge variations based on location, condition and other factors.

Comment: There are no sales, no clearance rack. If the price is too low, 10 other people will notice and go after it.

As for timing, it is true that you may have some added negotiation power in December and January. Homes on the market during this time have usually been on the market for a prolonged period. A seller may be more willing to negotiate – they may be fed up or desperate to sell by this point. But if no one else wanted it, why would you?

Comment: Exactly.

Let me illustrate this point with some compelling figures. In December 2012, there were 13,241 active listings in the Greater Toronto Area. Of those, only 4,295 were newly listed in December. That means, 68% of active listings have been on the market for at least a month. If we now look at those some statistics for May 2012, we see a very different story. There were 20,462 active listings in May, and of those 19,177 were new listings. That is 94% fresh listings – a very different picture! (Source: Toronto Real Estate Board Market Watch)

Comment: Which further supports my note above about pricing at different times of the year.

Waiting until spring will clearly give you more choice – and more competition. The extra competition could cost you a few thousand dollars more, but the larger inventory may just contain your “ideal” home.

Comment: That is also important – winter is a slower time, which means fewer listings. So the prices might be down, but so is selection. And you might not find your perfect home searching the dregs.

Why not compromise and blend both approaches? Start looking during the off-season, with managed expectations of your outcome. If you don’t find your home, then continue your search into the spring market. Yes, this means more work on your part – but it will be well worth it in the end.

Comment: And keep remembering that there are no “deals” to be had. Sure, it should cost less to buy over winter and you should get more selling in spring. But market value is market value and there are no “cheap” houses to be found.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto Realtor with Century 21 Regal Realty. He did not
write these articles, he just reproduces them here for people who are
interested in Toronto real estate. He does not work for any builders.
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