Should You Buy a Home this Holiday Season?
December 1, 2020
During a typical holiday season, when the weather is messy and there are feasts to be had, many Canadians prefer to cozy up at home and wait until spring to start their real estate ventures.
That’s precisely why the holidays are often a great time to buy a house: the market typically slows down, meaning less competition among house hunters and prices that tend to be more buyer friendly.
But with the 2020 real estate market being far from typical because of the pandemic, does the same principle apply? We think it might, to a degree. Though buyer competition is higher than ever this holiday season, here’s why it might be a great time to buy a home.
What’s different this year?
Since late spring, historically low interest rates have been propelling larger numbers of buyers in search of properties better suited to spending more time at home; as a result, many of Canada’s major markets have been rocked by record-breaking sales even through late fall, when the markets typically slow down.
Added to more buyer activity is the fact that new listings took a major hit in March, and although their numbers have generally been on the upswing, they’re still lagging far behind sales. Combined, these factors have made for fiercely competitive markets in many parts of the country.
But before you stow your hopes for a new home away until spring, consider what could lie ahead.
A year of record sales
In real estate, market conditions are usually analyzed by comparing one month’s stats to the same month the previous year (year-over-year comparisons), since buyer activity tends to ebb and flow with the seasons. By that measure, sales are continuing to hit astronomical heights.
For October, the Canadian Real Estate Association (CREA) reported that national year-over-year sales were up 32% over the same month last year1 and the Toronto Regional Real Estate Board’s Chief Market Analyst, Jason Mercer, stated that the Greater Toronto Area (GTA) should “[e]xpect record or near-record home sales for the remainder of 2020.”2 Since many of Canada’s major markets have experienced sales increases much like the GTA’s, his prediction may well apply beyond the Toronto region.
Competition is high, but it may get even higher
While record-breaking year-over-year sales point to the fact that there are more buyers out there than usual for this time of year, month-over-month data – where the current month is measured against the previous month in the same calendar year – is showing a slight easing on the throttle, which is hopeful news for anyone planning to buy a home.
This month, CREA reported that national home sales edged back 0.7% from September to October,3 and some of Ontario’s busiest markets – the GTA, Ottawa, and Hamilton-Burlington – saw month-over-month sales fall by as much as 8%.4 Though still competitive, these markets suggest that seasonal buying patterns may be dampening demand, at least for the time being.
Noting the recent changes, Randall Weese, licensed Broker of Record at Purplebricks, states, “barring any new curve-balls being thrown at us by the pandemic or changes to mortgage affordability, we could be looking at a return to more predictable buyer activity – albeit at a higher volume than we’ve seen in the past.” Of course, a return to predictable buyer activity means the spring could bring the typical crescendo of yearly sales activity. For buyers, this could mean even tighter markets, more frequent bidding wars, and higher home prices.
To buy, or not to buy?
Because real estate markets are affected by many complex factors at the local, national, and global levels – not least of which are the pandemic and the economy – there’s no sure-fire way to predict what will happen in the Canadian markets between now and the spring. But, if indications are correct and if there are no new impediments to Canadians’ purchasing ability (think stricter lockdown measures or increased interest rates), this holiday season may provide a small window of opportunity to buy before market pressures hit new heights.
If you’re ready to start your search, navigating competitive markets is best done with the professional guidance of a local REALTOR®. Purplebricks REALTORS® are dedicated to helping you buy the right home for your family while keeping your safety a top priority. And when your deal closes, we’ll give you $2,000 cash back* as a thank you! Sellers can also benefit from working with experienced, local REALTORS® for a low fixed fee, which can save you thousands in commission. It’s how we’re making Canadian real estate better. Call 1-855-999-9740 to learn more.
1. CREA October 2020 National Statistics, retrieved November 27, 2020.
2. TRREB October 2020 Market Report
3. CREA October 2020 National Statistics, retrieved November 27, 2020.
4. TRREB October 2020 Market Report, TRREB September 2020 Market Report, OREB October 2020 Market Report, OREB September 2020 Market Report, & RAHB October 2020 Market Report