I've updated these predictions, keep reading below!
This is my opinion of what is currently happening in the Mississauga real estate marketplace.
First of all, the market in Mississauga is softening, don't believe anything else that you may have read in the papers or seen in the news over the past few weeks. This is good for anyone who is planning on selling and buying a larger home. It is also good for anyone just buying a home.
If the market softens and, for example, if your home price drops $10k or $15k then the larger home prices will drop $20k to $30k or possibly more, so a little patience may pay off big for you. The trick is timing it right. If the market turns around and firms up on prices and improves in the next while, whether it be next week, next month or January, you have to try and time it correctly to get the largest benefit.
Now, I am not talking about rolling the dice and taking a chance. I am just saying that, for example, today your home may be worth $300k and the home you are currently thinking of buying may be worth $440k, but in early December your home may be worth $290k and that other home may take $400k. You may save $30,000
I have seen this time and time again over the years when there is a sudden dip in the market. The people who must sell the larger homes have to take a large price reduction to sell.
With all of this said, if you are trading up, then the home you are moving to will likely be your long term family home. It will be the home that you stay in for the next 10 years or even longer. So, does $10k or $20k really matter in the whole scheme of things? Maybe yes, but probably not as much as moving to a home that you really like and one that suits all your current and future needs.
I am just trying to help you make sure the $20k difference (or at least part of it) is in your pocket and not the other person's pocket!
Here is another real life example. Currently, I have 5 listings. Two of them are getting about 2 or 3 showings every 2 to 4 days. The other 3 are lucky to get 2 to 3 showings per week! Back in July and August (when the market is typically slower than the spring or fall) all of my listings were getting 1 to 3 showings per day and were selling within 7 to 20 days after putting them on the market. How times have changed.
What does this mean? It says that in order for
2 of my 5 listings to sell, the vendor will likely have to take at
least 3% to 5% off their current asking price to sell. For
the other 3 listings, the vendor may have to reduce their price at
least 5% (yes, at least five percent) in order to generate enough
showing to receive an offer that is 3 to 5% less than the asking
price. This is our current
real estate market reality and it does not appear that it will
turn around in the next week or two.
Now for the real tricky part. If you were to go out this weekend and buy that same home you like that is asking $449,900 and even get a 'good deal' on it and pay $425k what would you list your home at? Would your home sell quickly and what price would it sell for, especially if the market is now a little soft and you have purchased firm and are now under pressure and must sell. How much pressure can you take. Let's say you would really like to sell your current home for $305k minimum. What do you list at and what do you take, $310k, $295 or if you must, do you take $288k if someone submits a firm offer so you can get on with your life? These are all questions that you must consider.
Here is another real life example. If a house on your street came on the market in early September and the price started at $349,900 and is now $324,900 and is not sold, what does that mean? What is that house currently worth? Probably $320k plus or minus? Once it sells, it will set a new lower price benchmark for prices on your street. People will compare that sale price when they look at your home and say that your home is only worth $5 or $10k more, this is a strong possibility, especially since they cannot see a house that is already sold and compare the two homes properly.
The lesson in this is that other people who are more anxious than you may sell for slightly below market value in order to get their house sold. This in turn reduces your market value.
I am sure that you may have thought about many if not all of these possibilities for your own personal situation. As long as you are realistic in your asking and selling price, then you can go out and buy another home first and most likely you have a financial benefit by the entire transaction.
I am not trying to scare you. I've had many clients purchase before they sell. I just want you to have all the information so you can make the best decision for yourself and your family.
Update on December 20, 2004 regarding these comments: The average price in November did drop about 2%, read about what happened in real estate last month.
You may read more about buying or selling first here
I wish you much success, good health and happiness in life.
If you would
like to discuss issues like this or other questions you may have, please
email me at anytime
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