A client recently asked me, “Is a good time to upsize or conversely downsize?”
What they are asking is: is it a good time to sell a less expensive asset and buy more expensive asset like a condo to a detached home or if you’re downsizing you’re selling the detached home and buying a condo. Generally, the rule is if you’re upsizing it’s good to be in a buyer’s market, and if your downsizing it’s good to be in a seller’s market.
A buyer’s market is when the sales to new listings ratio is less than 40%. A seller’s market is when it’s greater than 60% and a balanced market is when it’s between 40-60%. It’s better to upsize in a buyer’s market because you’re selling a less expensive asset and buying amore expensive asset. And conversely the best time to downsize a seller’s market because you are selling more expensive asset and buying a less expensive one.
Interestingly right now is a perfect time to upsize, particularly if you’re selling a condo and buying a detached home in the suburbs. Condos are in a fairly strong seller’s market and are up about 42% over the last 2 years and detached homes are more balanced in the city and are in a buyer’s market in the suburbs. So, if you’re selling a condo and buying in the suburbs now is the perfect time!
I hope that helps? If you have any questions or you want to talk if you want to talk about buying and selling let me know. Or if you just want to have a coffee and a chat that would be great too!