Will Stock Market Volatility Impact the Sale of Your Home?
Are you planning to buy and sell a property in the near future? Deciding whether to buy or sell first can often be a tough decision. As the Canadian economy enters a precarious time and stock markets continue to tumble and recover, home buyers and sellers should be mindful of how this volatility might impact their purchase and sale.
Home Buyers needing to sell a property in order to close on their purchase should be paying particular attention. A short dip in stock markets often has no impact on Toronto’s Real Estate market. However, if you combine this volatility with increased recession chatter, consumer confidence could be impacted enough to reduce the number of active home buyers. Buyers may begin to question large purchases and consider waiting to see if a better bargain is around the corner.
Vacationers return to Toronto in droves by the beginning of September. This drastically increases the number of active buyers compared to August, typically making September a more appealing month to list your home. Time will tell if September will be a better month to list than August this year, and supply will likely have the biggest impact on prices. Many agents seem to be encouraging clients to list now to avoid the increased competition in September (active listings are up about 5% from the same time last year). We live in a city where a big part of the economy comes from financial services. If stocks take a beating and don’t recover shortly after, both consumer confidence and their pocket books are impacted. Higher priced homes are the most volatile as buyers in high price points are more likely to have earnings tied to stock markets.
It’s smart to pay attention to what’s happening with the economy and adjust your home buying/selling plan if needed. Volatility should be one of the main factors that you consider when you are determining whether to buy or sell first. The more volatile the market, the more risk that you won’t be able to fetch your ideal sale price. For other factors you should be weighing, check out my post from last summer on how to decide whether to buy or sell first.
