Moving Up in a Buyer’s Market
Is it time for more living space? Perhaps your family is growing. Maybe you’re starting a business and need work space at home. Or maybe your new job allows you to move up to your dream home! Whatever your reasons for thinking of moving up, the timing might be right!
It might surprise you to hear that now is a good time to sell and buy. The media is full of news about how it’s a buyer’s market and it’s taking longer to sell homes than it did in recent years. It’s true that selling requires more patience today. It’s also true that the current market represents a fantastic opportunity to make that move up.
We looked at sales of a typical bungalow with 3 bedrooms and a double detached garage in the $350,000 -$450,000 price range in the city of Edmonton in July. We then compared this to sales of two-storey homes with a double attached garage, priced between $500,000 and $700,000. These two properties represent a common step in home ownership for many families. Here’s what we found:
- The bungalows sold 34.6% faster! Average days on market for the bungalows was just 34 versus 52 for the two-storey homes.
- As of today (Aug 11 2018) there were 141 of these bungalows for sale in the city vs 584 of the two-storey homes.
- Taking the number of homes for sale and dividing that by the number of homes sold in the last month gives us the Absorption Rate. This tells us how many months of supply there are for each type of property. If sales continue at the same rate and no new homes came onto the market, it would take 3.7 months for all the bungalows to sell. However it would take 11.2 months for all the two-storey homes to sell!
Here are are 3 reasons why moving up now could be your best move:
- You’ve got more negotiating power!
Sellers in the higher price ranges are feeling the pressure right now. You’re not going to steal a house, but you do have more negotiating power right now than in the recent past. And remember, negotiating power doesn’t just apply to price. it also applies to things like possession day. Getting the moving date you want is an important part of the puzzle when you’re planning a move for your family.
- Sellers are more open to an offer “subject to sale”.
Let’s be honest, sellers don’t like to wait for the buyer to sell their own house before they can put up the SOLD sign. But with the shift in the market, more sellers are open to this idea. After all, if your home is in a more saleable price range than theirs, it’s smart for them to hitch themselves to your star! In a faster moving market, you’d likely find yourself in the position of having to sell your home first, without knowing where you’re moving, just so you can make a “clean” offer (ie. not subject to sale) on your new home. Alternatively, you could buy first, and trust that your home will sell before possession day on your new house. Either of those alternatives puts a lot of pressure on families. The current market being a bit slower offers you a rare window where a subject to sale offer is much more welcome!
- It’s unlikely you’ll be competing with other offers!
If you find your dream kitchen in a more expensive home and decide to take the plunge and write an offer, it’s unlikely you’ll have to compete with other buyers. With so many homes on the market, it’s less likely that you and another buyer will want to write on the same home at the same time. Any time there’s a multiple offer, the house will sell for its highest price. Shopping now reduces the risk that you’ll have to compete.
Whatever your reason for moving up, the current buyer’s market offers hidden opportunities you may not have considered. And by the way, single family homes in the $350,000 to $450,000 price range are in strong enough demand that you might even get more than one offer when you sell. I recently received four offers on a bungalow home in this price range the day that viewings started. And it sold for full list price!
Curious about whether or not moving now makes sense for your family? Talk to us! We’re good listeners! You can count on us to tell you if the timing is right for you to move up, or if waiting would be better for you and your family! Email info@WeSelledmonton.com anytime or contact one of our awesome REALTORS® directly!
– Kathy Schmidt, Broker Owner, Schmidt Realty Group Inc.