If you’re preparing to move into a smaller space, you may be wondering whether now is a good time to take this step. The truth is, downsizing can be a rewarding transition no matter when you decide to take it on. That said, understanding the local market can help you make a truly informed decision—and time your sale your next steps to meet your goals.
Here are five things you should know about the market if you’re downsizing in 2022…
1) Interest rates will rise
When the Bank of Canada raises interest rates, lenders inevitably follow suit. Under these circumstances, it can become harder for many buyers to afford a mortgage. That’s important to know when you’re selling your home, and if you’re planning on purchasing.
Experts initially said interest rates would likely rise by the middle of the year, but many have since revised that estimate. Due in part to inflation, the first hike is now expected sooner—and several more will be on the way.
This is worth keeping in mind when you’re downsizing. The good news is, you may be less impacted by rate hikes than those who are upsizing, given that you’ll have the money from the sale of your house to put towards a smaller home.
Moving out of your house and into a condo for the first time? Find out what you should know about the transition here.
2) Sale prices are holding steady
As a seller in the GTA, you’re in luck. While home sales and prices dropped in the early days of the pandemic, they soon bounced back with a vengeance. What followed was a streak of record-setting numbers, and many sellers made very tidy profits.
In 2022, prices are expected to continue growing. While we can’t predict the future, we can say that all signs point to significant increases. As a downsizer, selling sooner rather than later could mean more money for your next home.
3) The market is competitive
As you can probably guess, housing market demand is outpacing supply. The result is a highly-competitive home-buying environment. As a seller, you’re more likely to receive multiple offers under these conditions—which (ultimately) is likely to lead to a higher price.
If you buy a smaller home, you’ll want to be ready to compete. By taking steps like obtaining pre-approval (which will show sellers you’re serious) or finding a local agent who knows the local market (and can negotiate on your behalf) you can put your best foot forward.
It’s also worth noting that the GTA’s population is expected to grow exponentially in the years ahead. That could bode well for you if you decide to sell again in the future (or one of your loved ones does so).
If you’re starting to think seriously about downsizing, our blog posts on the process can help you stay informed.
- 5 Factors to Consider When Downsizing Your Home
- Downsizing 101: Should You Sell Your House and Buy a Condo?
- 5 Downsizing Tips for Luxury Home Buyers
4) The condo market also looks bright
If you’re buying when you downsize, a condo is your most affordable option. That said, the price for this popular housing type is on the rise—which could be good news if you wind up selling again, or passing down your unit to a family member.
On the whole, Toronto condos are great long-term investments that tend to appreciate impressively over time. No matter your circumstances and future plans, it’s good to have that type of asset after you sell your current home.
5) An experienced local agent can help
While downsizing can be a complex and (in some cases) overwhelming process, it can also be an exciting one. The key is working with a professional who can handle all of the moving parts—and help you make truly informed real estate decisions.
Look for someone who has assisted downsizers before and knows your market inside and out. An agent who meets this criterion will be best positioned to help you achieve success, no matter when you take this step. Finding an equally skilled financial advisor (if you don’t already have one) can also assist you in planning for the future, which can make your transition significantly less stressful.
Thinking of downsizing with our team? For over 36 years, our clients have trusted us to minimize risk, offer unbiased opinions, and ensure their best interests are served. Contact us today to talk about your needs, by emailing us at niels@christensengroup.ca or calling us at 416-441-2888 ext. 772.
