When it’s best to buy and sell

Even in a strong market like Toronto, the time of year you buy or sell a home can have an impact on its price. The spring housing season may be when the most sales and new listings show up on the market, but it is not necessarily the best time to buy or sell a home. In this post, we look at monthly average prices over the last five years across Toronto’s detached, semi, townhouse and condo segments of the market to understand when prices are traditionally at their highest and lowest points. With this in mind, the information in this post will likely be read differently depending on whether you are buying or selling a home.

To determine which months performed better than others, each month has been given its average sale price over the past five years (note: each year is weighted equally, sales totals per month in a given year have not been considered).

detached 5 year monthlySource: TREB, Six Housing Sense

Starting a trend we will see throughout all four housing segments, May has been the best performing month for detached prices over the past five years. Though the month did benefit from high prices in spring 2017, detached homes consistently sold at higher prices every May in comparison to the other months. Likewise, January proved to be the least expensive month to purchase a house. That said it is interesting to see August as the next cheapest month, showing a clear hiatus between the busy spring and fall markets. The price differential between the most and least expensive months has been noteworthy. Over the past five years, the average January price has been 14% less than May.

condo 5 year monthlySource: TREB, Six Housing Sense

The condo market sees the same best month for sellers and best month for buyers as May and January appear again, with January being noticeably below all other months. At the same time, while May had the highest average price, the condo sector offers far greater price consistency throughout the year than the other segments. Aside from a few months where deals can be found, both condo buyers and sellers can be confident regardless of the time of the year the price will hold. For condos, the gap between the high and low month is the smallest of the four sectors, though still significant, at 12%.

semis 5 year monthlySource: TREB, Six Housing Sense

Semi-detached homes see April taking the lead, though May’s results place it as a strong second. In comparison, the data yet again shows that January and August are the best months to find a better deal as a buyer. As the graph illustrates, the savings are impressive with January being 16% cheaper than April.

THs 5 year monthlySource: TREB, Six Housing Sense

For townhouses we see a new leader emerge, as October is the best month to sell. Looking at the top three months, the information suggests that autumn is actually the better time to list a home. On the flip side, January and August continue to be the months for buyers, with the price gap again being 16% between high and low months.

All sale prices are reflective of the quality of homes on the market, so it is important to look at the other factors that can influence prices. In general, most market conditions help to explain these monthly price trends. Year-over-year, sales to active listings totals are often at their lowest levels (buyer’s market conditions) in January but very strong in May (seller’s conditions). Average sale price to list price results also reflect these monthly trends. The percentage of list price that sales achieve is consistently higher in May and lower, though only slightly, in January. These additional factors suggest it is not the quality of supply in these months, but a marginal power shift between buyers and sellers that impact prices.

May is now upon us, so it will be interesting to see how this year performs. The average home price in Toronto in January was $830,043. Will the traditional 12-16% price improvement happen again this year?

2 thoughts on “When it’s best to buy and sell

  1. What date is used to determine what month a sale falls on? Listing date, closing date, date conditions removed, etc.

    Like

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