Chances are, you’ve heard the expression, “Your home is your biggest investment.” For most homeowners, that’s true. So, when you’re shopping for a new home, it’s important to consider the financial ramifications of any purchase. Ideally, you want a home that is likely to increase in value over time.
In other words, you want a home with a strong potential return on investment.
But dollars aren’t the only type of return you should look for in a new home. Real estate is unique in that the “emotional” return is just as important as the financial return — and, in some cases, even more so.
Say, for example, you’re thinking of moving to a neighbourhood that is closer to work. In fact, you’ll cut your commuting time by an hour each day. Financially, that return on investment means little beyond some savings on gas. However, the emotional payoff can be very high, especially when you consider what you can do with that extra hour each day. Imagine what it would mean to spend more time with your kids or workout out at the gym more often.
So, considering the emotional return on investment when you’re moving is essential. It has a huge impact on your lifestyle and your enjoyment of the property.
How do you factor that in when selling your property and searching for your next dream home?
When you see a listed home you like, make a list of all the emotional benefits of living there. That list might include having a park nearby, living closer to friends or family, having a home office that isn’t the kitchen table, having more space to accommodate a growing family, and so forth.
Then, factor that list into your decision of whether or not to buy.
Daydreaming about owning something you can’t afford can be fun. Whether it’s a diamond-encrusted watch from Tiffany & Co., or the latest Lamborghini, even the thought of trying one on or going for a test drive can be exciting.
The problem with daydreaming, however, is that it’s all-too-easy to dismiss it as just that – a dream.
But, what if you daydream about owning a beautiful home in a desirable neighbourhood? Before you dismiss that as just fanciful thinking, it’s worth finding out if that dream could actually be achievable.
You might discover that you do qualify to get into the home of your dreams.
It’s relatively easy to figure it out.
First, you need to learn what homes are currently selling for in the neighbourhood you’re targeting. If you’ve been through that exercise already, keep in mind that the market might have changed substantially in the past few months.
The next thing you need to determine is approximately how much you can expect to get for your current property. That’s a fairly easy calculation and is based on what “comparable” homes in your neighbourhood have sold for recently.
Finally, you need to find out how much of a mortgage you may need and what your payments will likely be.
Once you have those numbers, you’ll know if you can afford the home of your dreams in the neighbourhood you’d love to get into.
Got questions? Don’t hesitate, ask me (anything) by clicking HERE.
0:0 – Intro & the importance of knowing what’s going on.
1:11 – Last month’s stats compared to earlier 2022 and 2021.
5:06 – The five stages of a market.
6:31 – Interest rates, their importance, and what to expect.
8:25 – Rent inflation, going up.
9:08 – Immigration continues.
10:03 – Waiting will cost buyers.
14:18 – So what?
Thinking of having a yard or garage sale? It’s a great way to dispose of unwanted items and other clutter, especially if you’re thinking of moving. In addition, yard sales have a charm that selling items on the internet can’t match. That’s why they’re still so popular.
If you’re planning a yard or garage sale, here are some helpful tips:
Two-thirds of garage sale shoppers will find you via signage. So, be sure to place plenty of signs around the neighbourhood that clearly point buyers to your location.
Place in-demand items closer to the street so shoppers can see them from a distance. (For example, computers, electronic games, bicycles, exercise equipment, furniture.)
Buyers don’t want to pay a “fair” price at a garage sale. They want a bargain basement deal! So, price items accordingly.
Open early in the day. You’ll find that the biggest shoppers (the deal hunters) will stop by before 9 a.m. Some will be there before you open!
Be sure to have some cash on hand to make change.
Of course, you should also be as safe as possible and comply with all applicable public health guidelines.
If some items don’t sell, consider donating them to a community thrift shop or dropping them off at a recycling centre.
Intro
0:38 – Important lesson on waiting for the market.
1:49 – Last month’s stats compared to earlier 2022 and 2021.
5:56 – Number of sales so far this year, and expectations for all of 2022.
6:54 – First lesson, revisited.
9:08 – Two important takeaways
– 9:30 – Buyers
– 12:32 – Sellers
With the recent shift in the GTA housing market, and some areas seeing prices lower than in the beginning of the year, many homebuyers find themselves in a bit of a limbo. You may be one of them. It’s now easier to buy, with less buyer competition, and the inventory/selection has increased. On the other hand, there’s your “wise” uncle, or perhaps one of many tv/online gurus, telling you to wait till the market “crashes” before you actually purchase something. Like Warren Buffet, you think, your investment will be made at the perfect time. Well, maybe not.
As most folks know, there are a few reasons as to why the housing market got so hot. Inventory is always number one on the list, then buyer psychology, covid lockdowns causing increased savings for many, and (of course) the low interest rates. Interest rates, to hone in on one specific reason, were very low. When borrowing is that cheap, prices go up. But, when interest rates start going up…
So, back to that dilemma of yours. Let’s look at a very realistic scenario, just to see what happens when you wait for just the right time to buy. Here (with thanks in large part to my colleagues’ at the office) is a very realistic example with numbers.
If Person A bought a $1M house at the peak of the market, with an interest rate of 1.5% and the usual 5-year term. After paying the mortgage for 5 years, their principal balance will be around $828,720. So, they paid off about $171,280 in principal in 5 years. (Obviously a real mortgage of $1M or more would be actually 80% of the purchase price, etc.. But we’ll do 100% financing just for the sake of easier math.)
Some time passes, and the market cools down. It’s far from a crash, bubble-burst, etc. But, we all agree that a correction is happening. Let’s say that the same $1M home (or one just like it) is now on the market for $950k (so the price is down by 50k.)
Person B buys this house, in a slower market, which is good. But the market is slower, in pat, due to the increased interest rates. So, Person B has a $950k mortgage at the (new) rate of 2.5%, for a standard 5-year term. After paying the mortgage for 5 years, their balance will be $804,060. In other words, they paid off about $145,940 in principal in 5 years.When they bought, Person B was thinking that they bought for $50k less than Person A, but after 5 years, the difference is actually $24,660. That’s not insignificant, mind you, but less than half of the “discount” of buying in a slower market. They bought lower but paid a higher interest.
There is, however, one more piece to this (fake-but-realistic) story. See, Person A and Person B did not, obviously, buy at the same time. Assuming Person B was renting (otherwise they would have already been a homeowner and would be selling and buying in the same market,) they would have been paying rent the whole time that Person A was already a homeowner. Let’s say they were renting for $2500 (probably more in real life) per month and waited one year to buy. That’s $30k spent, with no particular monetary benefit to Person B. Had they bought at the same time as Person A, around 50-60% of that would at least be going towards principal. If it was 6 months of renting, then it’s still $15K of lost money and $7-8K of possible mortgage principal.
When we started, Person B thought they had bought for $50k lower than Person A. In the end with time and interest in mind, the final numbers were actually not that far apart. The reality of the housing market is, however, far less certain than my simple example here. How do you know that the market will be down in one year? How do you know that the house you like, and is available now, will be available later (in 6 months, in 1 year?) After over a decade in the business, and having spoken to countless realtors that have been in the business for almost as long as I’ve been alive, I’ve heard many stories of folks trying to “time the market.” Outside of sheer luck, in many ways, the folks in those stories were very sorry that they waited. Some, unfortunately, ended up not being able to buy what they wanted. Far from trying to perpetuate the “fear of missing out,” my intent here was to simply show you the reality of the housing market, interest rates, and the value of time.
I know that most cases, like yours, are likely a bit more complicated than the simple example above. If you have any questions, concerns, or just want to chat about the housing market, please feel free to give me a call.
If you’re like most people, you hope that you’ll receive your online orders within a few days. Sure, a purchase might occasionally arrive later than expected. That’s just the reality of online shopping.
But, what if you need an item delivered quickly, without risk of delay?
Here are a few suggestions:
Check if the product is in stock. That’s usually indicated on the web page, but you can also phone to confirm. In-stock items usually ship quickly.
Avoid special orders. Those always take longer to ship.
If possible, find out if the product is coming from overseas. The longer the supply chain, the higher the likelihood of delays.
Find out if in-store pickup is available. Retailers ship to their stores faster than they do to their customer’s homes.
Avoid ordering from a “bricks and mortar” store that doesn’t sell very much online. If online ordering and delivery is merely a sideline for them, delays will likely be common.
If possible, order from companies that promise a specific date or date range for delivery. For example, “Arrives by May 5.”
Getting online orders delivered on time is especially important for items you need when preparing your home for sale. If that’s the case for you, call today for more ideas.
Thorough review of what happened in the first quarter of 2022, including the market shift that happened mid-March, and what to expect of the housing market moving forward. A big thanks to Joe Bladek (Mortgage Broker) and Sam Thompson (Mortgage Agent) for inviting me onto their podcast.
1 – 1:30 Quick intro
1:30 – 18:30 Quarter 1 Market Review and what’s happening in April
18:30 – 30 Commentary and Q&A
If you have any questions about the market, want some clarifications, or simply want to chat about possible plans, please don’t hesitate to contact me.
Imagine you’ve been waiting for the right moment to sell your home and you’re finally ready to pull the trigger and list it. But, just as you’re about to put up the sign, you notice that a few other FOR SALE signs have unexpectedly popped up in the neighbourhood.
Oh no! Now there are competing listings. Does that mean you should put your plan to sell your property on hold?
Not necessarily.
Just because comparable homes are for sale in the area doesn’t mean it’s not a good time to make your move. In fact, even if there is a sharp increase in local listings, active buyers might still outnumber properties available.
In that scenario, you’d likely get several interested buyers.
And, even in the case of a buyer’s market, now might still be the ideal time to sell. Don’t forget, your home might have desirable features that some buyers are eagerly looking for, giving your home the advantage over others on the market.
In addition, a large part of a successful sale is in how a property is marketed and promoted. With effective marketing, your home is more likely to be noticed by the right type of buyers… buyers who are actively looking for a property like yours.
So, waiting for the perfect moment to sell your home rarely makes sense. In most cases, the best time to list is now.
That being said, it is helpful to find out exactly what to expect should you consider listing your property in today’s market. To find that out, call me today.
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