Why List Your Home in a Low-Inventory Market?

The words “changing real estate market” can strike fear into the heart of any homeowner, especially if there’s even a hint of the idea that your house might lose value. When uncertainty comes knocking, the typical action is often to do nothing at all until things turn around.

The trouble with that approach is that the real estate market is unpredictable and is always changing. 

Housing prices fluctuate, often due to factors beyond anyone’s ability to understand. This means the turnaround you’re anticipating might not happen, at least not when you expect it. However, there is good news!

Whatever the market is doing right now, you have many unseen possibilities and opportunities open to you. How do we know this? Because we have worked in Toronto’s fast-changing landscape for 30 years and counting. Our experience tells us that every market offers vast potential when you know how and where to look. 

In this article, we’ll talk about the challenges and benefits of listing your home in a low-inventory market when other homeowners are putting their plans on hold. 

A low-inventory market isn’t just a great time to sell a house. The rental market is competitive, which also means many opportunities for investors. The posts below may give you food for thought:

• What to Look for in an Investment Neighbourhood
• Is Now a Good Time to Become a Real Estate Investor?
• Are Housing Prices In Etobicoke Going Down?

How Can a Low-Inventory Market Happen in Toronto?

By definition, a low inventory market is when there are very few listings because homeowners feel hesitant to make a move. You might think this scenario is rare in a city with millions of residents. But it can happen, as evidenced by 2017 and 2022. Here are a few contributing factors:

• Strong demand: In this case, inventory might not be low by historical standards, but strong demand from buyers means listings get snapped up quickly. Ironically, a hot market can make some homeowners reluctant to sell for fear they may not find a suitable alternative once their house closes.
• Economic uncertainty: Will prices rise or fall? Will you get a better price for your home if you wait just a little longer? Questions like these can lead to many homeowners holding out for a better time that may never arrive. In the meantime, it means buyers have limited options.
• Government policies: Land shortages due to areas under government protection and increased red tape can restrict new construction projects, which can reduce the number of homes for sale.

Whatever the reason for the low inventory, it can have implications when selling your home. Nevertheless, the time to act should be when you’re ready for a change in your life, not based on what the market is doing. As you’ll soon see, the market can always be “in your favour” if you understand the conditions and follow a winning strategy. 

Listing Your Home in a Low-Inventory Market: The Advantages and Disadvantages

The advantage of listing during low inventory may seem obvious -increased buyer competition can lead to multiple offers and bidding wars. If that happens, simple economics dictates that the value of your house increases. In other words, the more people who want your home, the more money you stand to earn from your sale.

A higher price is one advantage of listing in a low-inventory market. The selling process will also likely be faster, which can mean less work and less stress for you. Once you accept an offer, you no longer have to keep your home meticulous for showings. Plus, there are no more last-minute phone calls to keep you on edge. 

Higher prices and a fast, easy sale sound great on paper, but there are other considerations. Here are some of the potential drawbacks:

• There will always be some degree of uncertainty. You may sell for a higher price than you thought now. But are you losing out if values continue to rise? This uncertainty is always present in every market.
• You will soon be on the other side of the transaction. Selling in a low-inventory market can be easy. But what happens now that you’re searching for your new home? Fewer listings make buying a challenge, even with ample funds from your sale.

Buying in a low-inventory market can be a challenging feat, but the articles below will help you get started:

• What Compromises to Make When Buying A Home
• How To Make Your Home Purchase More Affordable
• What Can You Buy in Etobicoke for Under $1 Million?

Tips for Successfully Listing Your Home in a Low-Inventory Market

When conditions favour sellers, it can be tempting to get complacent. Finding a buyer is a near certainty, so does it really matter if you make less of an effort? However, remember that unless you are relocating somewhere far away, you are going to become a buyer in a highly competitive market. In that case, it’s critical to earn top dollar from your sale so you can comfortably secure your new home. 

Here are some tips for maximizing your sale even in a hot market:

• Know the value of your home: Getting the right listing price is always vital to capitalize on any market. If conditions are slow, you need to stand out amongst other sellers. And even in a seller’s market, buyers have options, including waiting it out or not buying at all. Your price must be competitive no matter what!
• Enhance the appeal of your home: A few minor updates can transform the appearance and value of your property. Updating the exterior with a well-maintained lawn and colourful garden, a fresh coat of paint on all the walls, and new light fixtures throughout can help attract buyers. Above all, clean, clean, and clean some more! Attractive staging can supercharge the effect even more.
• Work with a professional real estate agent: Selling a home is a once (maybe) twice-in-a-lifetime experience for most people, and the market changes constantly. A local expert can guide you through all the steps to make the most of your sale whenever you decide to list. Marketing, online advertising, print materials, and networking with other agents are just a few ways they can bring your listing to the attention of eager buyers. 

Once you understand your position and advantages in the current market, you’re no longer at its mercy when planning the next step in your life. Instead of waiting for “a better time,” you’ll act for your own reasons and when the moment feels right for you!

Do you have questions about the current market in Etobicoke and what it might mean for you? We are here to help you achieve your goals at any time. Reach out today at contact@thompsonsells.com or call 416-450-5900, and we are happy to help you get started.