The best day of the year to buy a home in the Greater Toronto Area (GTA) is…(wait for it)…January 17.
Yep. That’s the day you need to be standing in your dream home — or even good-enough property — and ready to make an offer. According to The Toronto Star and TheRedPin, January 17 is THE day to house hunt if you want the best deal. This is good news for home buyers in Toronto looking for the best time to buy a home in GTA.
According to TheRedPin data, houses sold in January went for $70,000 less than the homes that sold in the spring of the same year. For instance, in January 2016, buyers in the GTA paid 1% below asking price. The data, which was collected by RedPin, stretched over a seven-year period and included sales data on 650,000 Toronto-area transactions. The result: Today, January 17, is the best day of the year to buy a home.
Talk about hashtag winning.
Not convinced? The Toronto Real Estate Board (TREB), analyzed sales data over a five-year period and found that January offered a better price opportunity for buyers. These results were later coined the “January advantage,” and this led to an expectation that the best deals can be found in the first month of every year. Keep in mind, however, that inventory tends to be lower at this time of year meaning buyers have fewer options.
Why are prices so much lower in January?
With less inventory on the market, sellers and agents have to be more conscious of their listing price. In the spring, sellers tend to market their homes at a higher price due to the increased volume of buyers and homes listed for sale. This makes January the best time to buy a home in GTA.
Buyers that are looking to sell during the winter months, January specifically, tend to be very motivated. Whether it be for career relocation, downsizing after the holiday season or just to ditch a mortgage payment — most people wouldn’t put themselves through the trouble of worrying about showings during a snowy and cold month.
Another reason that properties in the GTA tend to sell for less during the first month of the year is due to the amount of time they spend on the market. TheRedPin found that homes sold in January spend 24% more time on the market compared to other months, and an additional 38% more time to close the deal in comparison to peak months like May.
What about the 2018 market?
Most conversations with home appraisers, realtors and economists from the GTA predicted a 10% decrease in housing prices — specifically in the Toronto real estate market. Due to regulation changes, such as the mortgage stress test, that is now in play, January calls to be a much slower month than previous years.
All signs point to another great January to buy depending on the inventory and whether or not you’re able to find the home you’re looking for. “I think we’re going to see a slow January,” said Fleming. “We’ll pick up in February and then get really busy in March, April, June — which historically are the busy months.” So, what are you waiting for? Slow should be music to a buyer’s ears.
Historically, the second best month to buy a home in the GTA would be August. In 2017, the Toronto Real Estate Board (TREB) Market Watch report said that properties sold took a significant hit dipping nearly 35% in comparison to 2016.
The worst month to buy? May. Even though sales were lower than a normal spring market, prices stayed strong in 2017 with the TREB Market Watch report stating a 14.8% price increase over May 2016. However, the bright side would be that if you’re looking to sell, the spring is always a great option.
Is January 17th really the best day to buy a home?
Now that 2017 has passed, we can say that January 17 didn’t end up winning the annual market real estate battle, but in past years it certainly had. A small reminder to always watch the market and take advantage of your flexibility — that is, if you have flexibility.
“In 2017, the best time to buy was in the summer,” said David Fleming of the Toronto Realty Blog. He says to determine what’s “best” you’d first have to know whether that means the lowest sale price or a less competitive market. “Personally, I’d rather pay a small premium to find a house that’s perfect for me.”
Whether you’re looking for the right price, perfect square footage or less competition in the market, the best time to buy is when you need to. Having a flexible timeline can allow buyers more opportunity to do research and the ability to watch the market. In an unpredictable and overwhelming market like the GTA, it’s all about your own version of The Price is Right. If you have a down payment saved and are ready to buy property — what are you waiting for? Agents and market reports agree January is the time to start your buying journey.