As 2022 enters the final few months, you may be wondering about making your move now to sell a home. "Can I still sell my home?" "Should I sell in 2022 or wait until the spring market of 2023?"
In every situation, this is a personal decision. If now is the right time for you and your family to move, there's no reason not to enter the market by listing. Some sellers, though, have flexibility and want to ensure they are selling at the ideal time when they can get the best price for their home or the fastest offer.
Let's take a closer look at the market and overall conditions to get a better idea if now is the right time to sell.
What’s to Come in the Mortgage Market
There is no doubt we are entering a bit of a period of the unknown in real estate. For the last few years, most areas have seen a significant amount of growth in home values. That's thanks to the COVID boom and less overall inventory on the market. On the other hand, mortgage rates have been low and slow to move. The last two years, it was pretty easy to obtain a loan with a decent credit score and income - and at a very low interest at that. The climate of seller’s market, with quick offers and competitive bidding, has changed.
The Bank of Canada has just announced another interest rate hike, and experts are predicting more in an effort to control inflation over 2023.
Here are some things to expect about the near-term future:
- Home prices are likely to stay high for some time. Yes, there will be a shift, but an outright crash is not being predicted.
- Mortgage rates are likely to become more stable, though most will see an uptick in mortgage costs right now. That means, for sellers, some buyers will be holding off purchasing now because of the added cost.
- Supply issues — with limited homes on the market — are likely to continue, though some areas are seeing an increase in inventory.
Mortgage Rates Could Impact Buyers
Home buyers often need the lowest interest rate possible to make the purchase of a home affordable. There is evidence that interest rates are a big factor. Banks will likely continue to make changes to interest rates charged to home buyers.
What does that mean for today's home seller? Monitor mortgage rates both for yourself, if you plan to buy a home now, and from the point of the buyer. Buyers may be fewer, and it may take a bit longer to sell a home if interest rates climb much more.
What to Expect If You Sell in 2022
Many experts believe that the final push of 2022 will be more of a return to the normal of pre-pandemic periods.
Price Peaks
Selling now could be vital if you want to get the best price for your home. Our recent statistics show that prices are already slowing their rapid increase. Throughout the Greater Toronto Area, price reductions are hitting home listings, which means overpricing a home to get higher bids is no longer ideal.
Listing Competition
Home listings are retreating too. In the summer months, many areas saw significant growth in the number of homes listed for sale. Inventory became a bit more flush, providing more opportunities for buyers. For sellers, that means more competition. However, that’s turned around a bit. We are experiencing the lowest number of new listings hitting the market since 2002. With fewer homes listed in the fall/winter months already, this means less competition and, as a result, a faster and potentially higher valued sale if you sell in 2022.
The Unknown of 2023
So, should I sell my home in 2023? Some people may feel the desire to put off their home’s sale until next year. Doing so could be met with more uncertainty, though.
Inflation will be an ongoing factor, as could a recession. That could mean a drop in home prices in the coming months to years. While there is some predictability in what is likely to happen in 2022, there are a lot of unknowns about what could happen by next year.
A key factor is home affordability. A 30-year, fixed-rate mortgage on a median-priced home today has a $ 2,000-a-month payment. That’s a 53% jump from just a year ago, according to Realtor.com. That's a significant increase, and wages are not growing at nearly that rate. The result is that homes are becoming less accessible to many people, and that could become more obvious in the real estate market during the first portion of 2023, if not sooner.
What’s It All Mean to You?
As a homeowner hoping to sell, there are a few things to consider. First, the real estate market is calming, returning to more “normal” conditions as it was prior to the pandemic. That’s a good thing overall for sellers who price their homes right and don’t anticipate huge bidding wars. Housing availability is still low, which means selling your home in 2022 could mean getting somewhat of a boost in value if you are in a competitive market.
Overall, your best bet is to have a comparative analysis of your area by your agent. That's going to give you a far better perspective of what's to come. For many property owners, there's no benefit to putting off the sale of your home right now. Instead, it's a good idea to take advantage of the current conditions.
Let's Get Started
If you'd rather not wait to start the process of selling, the first step is finding out your home's value. We'd be happy to prepare a Comparative Market Analysis for you.
