Your home is likely the biggest purchase you will make in your lifetime; a proud culmination of years of hard work and diligent saving. Because of the significant cost, you are rightly looking for any way possible to save money on your purchase. When it comes to homebuying, like many things in life, timing is everything. Choosing the right time to buy can save you thousands of dollars on your purchase price.
Historical data says that seasonality tends to affect the number of homes for sale and the purchase price. During the spring buying season, the inventory is plentiful as people are gearing to sell while the weather is nice. The number of buyers is increasing as well. Conversely, in the winter months, the inventory and number of interested buyers both dip down.
There is a well-established cycle real estate pattern: home sales heat up every spring and summer, and then, as the leaves begin to change, the market starts to cool.
Data from The Canadian Real Estate Association shows that although COVID-19 has shifted many real estate trends, it has not impacted the seasonality of the market. Buyers and sellers rise over the spring months, peak in the summer, and decline into the fall and winter.
While it may be tempting to start your home search and purchase when the weather is warmer, there are several money-saving benefits to purchasing in the fall season:
Just as the warmer spring temperatures bring buds blossoming on trees, real estate listings also flood the market. It is a mix of serious sellers and homeowners testing the waters to see if they can get the price they want. By the fall season, people are no longer testing the waters; homeowners are motivated to sell, and chances are they want to get moving before the winter chill and holiday season sets in.
Further motivation may be the desire to get a tax write-off before the end of the year. All these factors bode well for keen buyers, helping you scoop up a home at a lower cost or negotiate other terms in your favour, like a more reasonable closing date.
When you combine eager sellers and fewer buyers, you get a buyer’s market. Sellers may be willing to take less money than they initially hoped. Though housing has been on an upward trajectory for a long time, fall and winter offer a plateau point to enter the market.
In addition to motivated sellers, there are also fewer competing buyers in the fall real estate marketplace. Homebuyers, especially those with kids, typically want to be settled into a home before school starts.
Once autumn is in full swing, buyers put home shopping on hold until the spring to avoid uprooting the family mid-way through the school year. You put yourself in a more advantageous position by waiting it out and being open to moving when the weather is a little less balmy. If you happen to find the perfect home, you are far less likely to engage in a frustrating, stress-inducing bidding war (or at the very least, the pool of competing bidders is likely to be smaller, increasing your chances of securing the home).
Fewer buyers and sellers mean that real estate agents have less on their plate in the fall. After a busy summer, agents now have more free time to spend with you, exploring neighbourhoods that may be a good fit, or pouring through listings to discover the best deals.
Additionally, they will likely have a more flexible schedule in the slower fall season, giving you more options to schedule viewings.
Not only will your agent have a lighter workload, but the same trends will apply to brokers, banks, contractors, and inspectors; all of whom will play a part in making your home purchase a reality.
Summer is when homes look their best. Lush bushes and a thriving garden hide the foundation. Dry, sunny days pose no risk of exposing areas where water gets in the basement. Summer vacation may even have taken the noisy neighbours out of town. Fall changes all of that.
A rain-soaked November day will give you a better look at the foundation, revealing any signs of flooding or water damage. Plus, the neighbourhood is back in full swing, so you’re more likely to get a feel for the typical volume of traffic on the street and the quality of the neighbours.
The recent public health crisis has sent housing prices soaring across Canada. Projections for 2021 suggest that the cost of housing will continue to rise into next year. The unpredictable market may impact the tried-and-true trends that we describe above. It’s best to speak with your real estate agent for their expert opinion on what is happening locally.
Happy house hunting!