As we saw in an earlier post, seasonality can play a strong role in influencing market conditions. Aside from seasonal patterns, a slew of other factors also can have a bearing on market activity, and by extension, how much of a premium you might be able to sell your home for:
1. Interest rates. While interest rates are currently sitting at historic lows, there is no guarantee that this trend will continue indefinitely. The Bank of Canada has suggested that rates will likely rise in the coming year. If and when that prophecy comes to fruition, consumer affordability will drop, leading to an overall cooling of the real estate market. Selling a home while interests rates are low and buyer demand is high maximizes your chances for a sale at top dollar.
2. Immigration and demographic shifts. Given the relatively low birth rates in Canada, it’s no surprise that much of our demand for real estate is driven by immigration. Sudden upswings in immigration (e.g., in the years leading up to the Hong Kong handover to China in 1997) have historically had profound impacts on our local market. Here at home, it’s postulated that changing population demographics (e.g., as the Baby Boomers age and downsize to smaller and smaller residences), there might be more pressure put on certain facets of the market (e.g., a shift away from single-family homes to townhome/condo living).
3. The economy. When national economic sentiment is positive, the local real estate market tends to fair well, as consumer confidence is generally high at these times. Due to higher “international” involvement in our local real estate market, increasingly economic forecasts from other nations—most notably the United States and China—seems to have an influence on consumer attitudes.
4. Government policy. Temporary tax credits, grants, and deductions are all tools at the government’s disposal for shoring up real estate demand in the short-term. Knowledge about the timing of these programs can potentially save a home seller thousands of dollars.
In conclusion it’s important to note that while trying to time the market looks simple on paper, in practice it’s rarely easily to achieve. The housing market is constantly adjusting and readjusting itself based on buyer demand and seller supply, as influenced by the principal factors listed above. As such, even the most carefully timed home purchase don’t always work out for the best.
When selling a home and making a subsequent repurchase, it’s important to keep in mind that unless you’re willing to sit by the sidelines and speculate, you will be purchasing in much the same market that you likely sold in. As a result, in particular in these cases, trying to time a sale to maximize cash in hand can sometimes be all for naught. As such, most real estate advisors will recommend that when the time feels right to you to go for the plunge. Who knows what surprises tomorrow might hold!
If you have questions about the market or would like to discuss anything mentioned in this article, feel free to send me an email or drop me a line—I’d love to chat. I’m a Vancouver Realtor who is an expert in residential real estate and sell extensively condominiums, townhomes and detached homes.
Neil was an absolute delight to work with in the sale of our home and purchase of our new one. I appreciate his attention to detail and enthusiasm despite some hurdles we encountered along the journey. His professionalism and down-to-earth nature made the whole experience an easy and fun one."-Trevor Tang, Vancouver
I have had the pleasure of working with Neil and it is clear to me that he is genuinely focused on using his knowledge and expertise to make the home buying process go smoothly for his clients. He asks good questions and if he does not have the answer he ...more-Ania Mizgalewicz & Elan Young, Richmond
I definitely recommend working with Neil Chahal. Just ask to speak with him on the phone and you will know why..."-Eitan Pinsky, Vancouver
It was a great experience to buy our first home with Neil; he is honest enthusiastic and very dedicated and most important has extensive knowledge and expertise to help you make the best choices."-Eran & Naama Rozen, Vancouver
Not only is Neil very thorough and professional, but also he did a lot more for me than I ever expected from a Realtor. He was always on top of things and kept me informed every step of the way."-Glara Kim, Vancouver
Not only have we gained a home but we have also gained a trusted friend; someone who is willing to listen and go above and beyond what is called for. Thank you Neil!"-JP & Joanna Espiritu, South Surrey