Brrrrr … February arrived like a mountain lion. The forecasts were mixed, but some weather pundits did predict a harsh winter. And this month has proven those predictions right. It came later than expected, but a real old fashioned Canadian winter has set in.
These cold temperatures have provided almost perfect conditions for building and maintaining natural ice rinks, but this frosty climate isn’t that great for the real estate market. Still, like the hardy skaters who insisted on lacing up the blades in temperatures at times best suited for polar bears, there were a few buyers who pulled out their boots, woollens, and cheque books, and sought out the few listings that were available in January and early February. They were looking to get the jump on the 2015 Beach market. These winter buyers perhaps felt that these cold conditions were sure to keep other buyers on the sidelines. The cold and snowy weather did stall sales somewhat, and maybe favoured those winter buyers. But there were still a couple of sales that rang the bell at prices that were surprising, bringing belated Christmas presents to some Beach sellers.
It’s hard to peg down just what the temperature is for the Beach market, and where it’s going to go in the short term. Certainly we’ll witness the usual steady increase to the listing inventory in most price ranges as we head into the spring market. Buyers will follow too, as the weather becomes more affable.
But how’s the market looking in the near term, specifically last vestiges of this chilly February, and before the March Break signals the impending end of winter? What I’m targeting are the options open to you in setting your list price, should you consider putting your property on the market in the next few weeks.
Most properties are valued by owners and their real estate representatives based on similar properties that have traded or sold recently. This method of valuation, commonly referred to as ‘Direct Sales Comparison,’ is perhaps the simplest and most widely understood. Comparable sales usually means those in the last 60 days. Awkwardly though, if you’re valuing your property in mid to late February and early March, there’s a pretty good chance that there haven’t been many property sales within the last few months to get a good gauge for where the market is trending. This is especially true for higher-end homes selling for at least $1.5 million. Going back to the fall market can sometimes be misleading, since the Beach fall market can often be a weekly market with the latter half of that season’s numbers trailing off.
So, if you’re looking to be earlier to market than other sellers at this time of year, I don’t recommend setting an artificially low list price, crossing your fingers that you’ll see multiple offers create a bidding war. There may not be the numbers of active and ready buyers that you or your agent think there are, especially if the weather is still cold and snowy. Buyers know that as spring approaches there will be more listings coming out, and may wait just a few weeks more into March and April before they take that plunge.
If you’re pricing artificially low, you’re likely holding back on offers by perhaps five days. And in that five days, at this time of year, there could be several other homes that hit the market and cut the numbers of potential buyers, and ensuing offers, for your home.
Of course, the other side of the pricing fence is overshooting and setting too high a list price. But if you’re quick to adjust your price to stay in line with newer listings, depending on your timetable and motivation, you can succeed in your price goal.
My suggestion is to set a list price that is viable compared to your goal. If you want to see, for example, a million dollars, then list your home just above. If a few thousand dollars doesn’t bother you, then try slightly under that mark and stick to your price. If you have some time to play with then you can set it a little higher, and build in a little negotiation room. Just be careful not to get enticed into setting too low a list price and counting on multiple offers to take you to where you want to be.
Because at this time of year, the buyers, too, are just beginning to thaw out.
Thomas Neal is a well-known and respected Beach agent
email@example.com ~ 416-690-5100