According to my day-planner (and yes, I still have an old-fashioned paper calendar…), there are still 35 days left in 2014.
So why am I suggesting it’s over?
Well in real estate terms, the year is just about finished, as the “Fall Market” draws to a close.
Not all hope is lost, if you’re a buyer, however. Persistence pays off in this market, and if you remain active, you just might find a place when many other buyers have already checked out…
No, really – I still have a paper day-planner that I use, every single day.
I just can’t seem to make the jump to the iPhone calendar (or even before when I had the Blackberry….), and I’m not sure why that is.
Perhaps I like flipping pages through a 3-ring binder, as it reminds me of being in high school.
Or maybe I just like writing things in pen.
Do you guys still read books? Or do you read on a Kindle? I like turning pages, using a bookmark, and of course – inhaling that “new book smell.”
And plus – my day planner shows that today is the 330th day of 2014, and there’s only 35 days left in the year. I’m sure that Apple has yet to master the complicated algorithm behind these numbers…
So yes, we are in the last week of November, and I find myself telling all of my buyers the same thing, “The year is almost over, and chances are, we won’t find anything. But that’s just the odds talking, and I still think we should be diligent.”
I say that, and then I never follow up with new listings because there aren’t any!
The closer we get to Christmas, the lower the chances are that my buyer clients find a property before we flip the page to 2015.
And it doesn’t matter if my buyers are looking for houses or condos, low-end or high-end; the 2014 real estate market is almost over.
A great question at this point would be “Why?” Why does the market slow down in the end of November?
Well as I’ve written before several times, the real estate market is truly a game of “chicken versus egg.”
The buyers are out in full force when active listings are at a high. But the sellers won’t list until they know buyers are looking. Chicken-and-egg, or cat-and-mouse, but however you define it, this means there are peak periods of the year, and then there are times when sellers just don’t want to list.
December is one of those times.
For a seller to list his or her property for sale in December, a serious risk/reward analysis must be contemplated.
If it’s a condo, then the situation isn’t as dire. The condo market is not nearly as cyclical as the housing market, and is generally immune to Spring Break, Summer Vacation, and other slow times that are experienced by families, who of course, own single family homes.
But if you’re looking at selling a house in the month of December, my first question would be, “Why can’t you wait one month until January?” Believe it or not, January can be a very good time to sell – specifically the middle-to-end of January, as many buyers who didn’t end up purchasing in the Fall market will come flying out of the gates in the New Year.
So why can’t a seller wait a month? Sometimes, their hand is forced, ie. they purchased a house in November with a January closing date, and they need to have their existing house sold FIRM in order to get financing to close the new one. Thus, they need to sell in December.
Sometimes, a seller sees opportunity where others see risk. If you’re looking to sell the typical 3-bed, 2-bath, semi-detached house that first-time buyers covet, then maybe listing in December is a shrewd move. Maybe distraught buyers, who are fearing waiting until January/February to buy, after a trying September/October/November, would throw the boat at a property that’s listed in December, because it represents their “last chance.”
I say “maybe,” because while it can happen, and has happened, I still think it’s a risk I wouldn’t take, unless I had to.
If a seller has flexibility, then perhaps that seller can try to sell in December, and if the desired price isn’t achieved, then the seller can try again in January.
But that strategy leaves a bitter taste in my mouth, since “trying” in real estate, without succeeding, results in “failure” in the eyes of many participants in the real estate market. When I see that a property has been listed twice, it’s one time too many, in my opinion.
Consider a property that comes out “new” onto MLS in the second week of January, and a quick search of the property’s history shows that it was listed for 26 days in December, before being terminated. I’m more than likely going to view this property in a more negative light, and perhaps assign a lower value to it, because it’s already been on the market once before, unsold. Sure, market conditions change, and some buyers have a short memory, but if I’m looking to make an offer on that property, the listing agent might say, “We’ve only been on the market two days,” but I’m saying, “Actually, you’ve been on the market twenty-eight days.”
It seems to me that listing a property in December comes with certain risks, and if those risks can be avoided, then they should be. We don’t all have the luxury of being flexible with timing, but if you’re the type of seller who hasn’t bought a property yet to move to, then just wait another month, and eliminate the risk.
The risk, of course, is that buyers aren’t focused on the market, and aren’t seeing your property. Which is ironic, since those buyers aren’t focused because historically there isn’t a lot to see! Like I said, it’s the chicken and the egg.
If you want numbers to back up my rhetoric, then fine.
Here’s how new listings in Toronto look in November and December the last two years:
November 2013 – 9,345
December 2013 – 4,102
November 2012 – 9,775
December 2013 – 4,267
If new listings are dropping 60% from one month to the next, it’s no wonder buyers are becoming relaxed, and losing focus. As a result, it’s no wonder sellers don’t want to bring out listings when they know buyers are losing focus. Chicken and……ugh….nevermind…
But it’s not just the numbers, it’s the time of year too. We know this, and perhaps this is a better argument than the numbers can provide.
December is a cold, dark month in Toronto, and I think we all count the days down until Christmas (whether you celebrate it or not, it’s the focal point of December), when we can get a few days off, and even if we have to work in the week between Christmas and New Years, the work isn’t that tough, and attitudes are lax.
December is filled with Christmas parties, er, “Holiday Parties” to be politically correct, and the mood around many places of work becomes a bit more joyous, and often less intense.
We start to look forward (or dread….) seeing family and friends we haven’t seen in a while, and when all is said and done, actively searching for real estate loses a little bit of importance when compared to all that’s going on in the month of December.
Whether it’s planned, or unintentional, it’s often unavoidable that the real estate search slows down.
Believe me when I say it’s not for lack of effort on my part. I wish I had a 1-bed-plus-den, 1-bath, with parking, in the St. Lawrence Market area right now for $350,000. I have two clients looking for the same thing, and both are probably wondering why I’m not sending them new listings.
Well, there aren’t any.
And it pains me to tell my clients, some of them who I just started working with in October, “The real estate year of 2014 is just about finished, even though 2014 actually has more than a month left.”
I’m still diligent in December, and you can catch lightning in a bottle if you try hard enough. I sold three condos in December of 2013, and one house. All four buyers were people who had pretty much accepted that they’d be buyers in 2014, and I’d be lying if I didn’t say I felt the same way.
But just because odds are not in your favour, doesn’t mean you should stop looking.
And even if you’re actively looking and you don’t find something, the work you put into the month of December will pay off in the New Year, since you’ll have the experience and knowledge to jump on something right away. “New” buyers in 2015 will still need to go through the motions, learn the market, get familiar with prices, and do their due diligence.
Put the work into December, and it’ll pay off in January. And who knows, it just might pay off a week before Christmas. It happens to somebody, every year…