Over the past decade the Toronto housing market has seen drastic change as year-over-year house prices have been growing at record rates. Although this trend is expected to continue, there are still opportunities throughout the year that present home buyers with more favourable scenarios.
The winter months in Toronto are not typically seen as the heyday for home buying. The cold weather can often deter buyers from hitting the open-house pavement, and the thought of packing and moving on a cold winter day is not at the top of anybody's list of favourite activities. That being said, if you can look past some of these downfalls the cold months are conceivably full of opportunity for home buyers.
Month-to-month fluctuations in the average resale home price1 indicate that homes selling in the winter months sell for less on average than during spring, summer, and fall. There are generally fewer buyers during this time of the year, and the sellers that are in the market are often doing so with a sense of urgency to sell, a reluctance to drag out a lengthy negotiation process, and an inability to pull the listing and wait for the next hot selling season. These factors can shift the leverage to the buyer in what has become a seller-friendly market. This can translate to less competition and fewer bidding wars for buyers that are shopping during this time of the year.
This can be seen when viewing the amount of time listings stay on the market during this time of the year. With listings remaining active for close to 25% longer during the winter, sellers can be very motivated to sell and may be more willing to negotiate on price and conditions. For buyers looking to purchase a new home, this can be a great opportunity to take advantage of. Even a small savings in the total amount you spend on a house can make a significant difference once you factor in the interest charged on your mortgage. For example, let's say you are planning to purchase a home with a 4% closing cost and a 25-year mortgage with a 4% interest rate. If you can purchase the same home in the winter for $600,000 instead of $625,000 during the summer, you can see a savings of over $45,000 on the total cost of your mortgage. A small savings now can mean more money in your pocket for years to come.
Another benefit to buying in the winter is that you get to see the how the property stands up to the elements during the coldest months of the year. In a city like Toronto, where heating your home during the cold months will have the biggest impact on your annual gas costs, there are benefits to seeing how the home holds up first-hand. If, for example, there are areas of the home that are not well insulated, you will be able to identify this much easier when it's cold outside. Other items that you can check for during this time of the year are frozen pipes, roof leaks, and gutters. All items that can cost you money to repair or replace down the road.