THE VIEW FROM OAK PARK
The Official Krisztina Blogsite
Timing is everything. It’s a cliché. An idiom. A saying. A proverb. The dictionary defines ‘timing’ as the selecting of the best time for doing something in order to achieve the desired or maximum result. In the current housing market, the best time is NOW. The desired result? A home upgrade (or ‘moving up’) for the best deal. This is because the lower housing price range has recovered faster than the higher housing price range, which is still ‘recovering’. Translation: a 4 bedroom, 2-car garage home in a nice area is sitting solidly at pre-recession prices. If that home was in the $450,000 range, you could easily move up to a home in the $600,000 range. Today that upgrade would cost you $150,000. By the Fall, I believe that gap will rise – meaning that $150,000 may be $200,000+ within just a few months. Since March, I have been advising my clients of this trend and encouraging them to buy ‘up’ quickly. Some of my clients didn’t put enough weight in the numbers, preferring to listen to the media (which, just like its stock market reporting, tends to be a little late on actionable information). And now those same clients have lost the opportunity to save $30-40,000 since March! If they continue to hesitate, another $50,000 in savings may be on the line.
When markets recover, the lower end recovers faster, but in the longer run, the larger homes will prove the better investment. Lower priced homes will recover and plateau, perhaps increasing in the range of 5%. Higher priced homes will eventually regain their value, increasing somewhere in the range of 10%. Put into real dollar terms, a 5% property value increase on a $400,000 home equals $20,000. A 5% property value increase on a $600,000 home equals $30,000. A 10% increase on that same home would be $60,000!!
We are currently experiencing more multi-offers. The housing inventory has been low, and sellers have been hesitant, driving the market up. As an example, a bungalow in southeast Oakville was listed for $639,000. It sold for $678,000!! But I believe that it will gain value over the next year and soon be worth $700,000+!! As well, in the same southeast Oakville area, homes in the $1,000,000+ range showed very little movement in the February/March/April timeframe. But those homes are now selling.
So the timing is working for you right now to move up. And given the numbers, you may be able to afford the move up today, but by October you may not. To top it off, the Oakville/Milton/Burlington housing history has shown that August is the slowest month for sales movement. Yet another reason to take advantage and buy that property you’ve had your eye on. And if you want to delay your move, go ahead and close the deal, just extend your closing.
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