Do Stats Matter When Buying or Selling Toronto Real Estate?

Once you’ve made the decision to buy or sell a house, a common piece of advice is to get to know the real estate market. This sounds great in theory, but where do you start? Often, the first thing people will do is check out all of the latest statistics reported by the local real estate boards.

Pouring over the recent data gives you an idea which houses are selling where at what prices. Plus, you can examine the slight percentage increase or decrease from the same time last month and last year. What does all of this have to do with your buying or selling strategy? In this post, we’ll endeavour to find out.

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Focus on the Big Picture

As a real estate agent who is committed to getting outstanding results for my clients every time and in every market, I am obsessed with strategy. That’s why I hit “delete” as soon as these latest reports reach my inbox.

Real estate is about people and making real connections, not numbers and statistics. Your dreams and goals matter, but getting stuck on an endless loop of data analysis hinders rather than helps you achieve them.

It may be a contrarian approach in an industry that lives and dies by the numbers. But imagine you’re selling your home. Does it really matter to you that the number of sales are up or down this month by a fraction of a percentage over last? How will your selling strategy change knowing that prices have increased or decreased by a thousand dollars or so, especially when average housing values hover close to the million dollar mark?

In my experience, this barrage of percentage and statistics flying at you from all directions only causes confusion and paralysis. A laser-like focus on what really matters can mean the difference between making a positive change at a perfect time and putting off the decision until the numbers “improve.”

Statistics in real estate fluctuate constantly. If you want consistent results and an outstanding return from your transaction, I’d suggest looking a little deeper.

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Consistency Is Key

Earlier I asked how your strategy might change depending on the latest statistics. When selling your house, you want to command top dollar, which means preparing for the market. Will you skip out on any high-return renovation because prices are up by .01% this month? Or would you live in a construction zone and perform a series of expensive upgrades because they’ve fallen by .02?

If you want to achieve the best results, we’ll make a consistent effort no matter what the numbers say. This means presenting and marketing your home to appeal to the maximum number of qualified buyers out there. The statistics may come into play a little when determining your optimum price. Even then, it will depend more on your location and the condition of your home than anything else.

When buying a home, statistics and comparisons likely matter even less. You’ll decide how much you’re willing to pay based on what you can comfortably afford and get financing for. You’re not suddenly going to blow your budget because the latest report says prices are up slightly. Instead, you’ll work with a real estate agent to find a quality house in the right neighbourhood that falls well within your budget.

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What Really Makes a Successful Transaction?

A seller’s market happens when there are too few listings and multiple buyers all competing for them. A buyer’s market means the opposite is true. There are plenty of homes for sale and only a few people hunting for them.

As a buyer, it can be frustrating to face endless competition for too few houses. You may get outbid a few times before securing a place of your own. However, you don’t need multiple houses, you just need one. With a little patience and the help of a qualified real estate agent, you will find what you are looking for.

As a homeowner, it’s ideal if you can sell during a seller’s market. There’s a good chance you’ll have multiple buyers vying for your property, and you may end up receiving more than your asking price. But that doesn’t mean you need to avoid selling until conditions change.

The same principle applies; a successful transaction doesn’t require multiple buyers. You just need one. In a buyer’s market, finding that one may take longer, but they are out there.

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The Numbers Are All Relative

Short term fluctuations in the market have been known to cause a lot of panic for both buyers and sellers. Just imagine, you’ve purchased a house, only for it to decrease in value a few months later. This can be disheartening, until you consider the long term trends.

If you buy today at $1 million and values drop by 1%, your property is still valued at $990,000. Not that anyone ever wants to see those numbers go down. However, that’s a drop in the bucket compared to the massive increase in real estate values over the last 10 years.

Now let’s look at it from a seller’s perspective. Imagine you paid $500,000 for a house 10 years ago and sell it for $1 million today. Maybe the market has changed, and maybe you would have earned $1.1 million if you sold a year ago. But focus on what you have gained rather than on what might have been. $500,000 is an impressive return on investment no matter how you look at it.

In addition, if you sell for a slightly lower amount because it’s now a buyer’s market, remember that you will also be able to buy a house for less. Earning a high amount because demand is through the roof means you’ll likely pay more once you re-enter the market as a buyer. In the short term, the numbers are all relative. In the long term, real estate remains a solid and relatively safe investment.

Do you want professional guidance when buying or selling real estate in the GTA? Reach out to our team at 647.620.2882 or email OMarjanovic@kw.com with any questions.