Need some advice from Canadian on this board: should I sell my house now or wait...

[MikeL]

We are a couple in early 50s living in GTA, have one kid working and living in Seattle. We decide to move to Calgary as that's closer to Seattle and we like the mountains. so we bought a house in Calgary last month, and now when we tried to sell the house in GTA (paid off mortgage, no HELOC on it), the housing market slowed down. we could still sell it but have to lower the price by about $200K than we originally planned.

 

I work from home permanently, wife has a good job in GTA but has to quit if we move to Calgary. 

 

Now we couldn't decide between these 2 options:

Option 1, cut the price and sell the house to move now, wife will lose the job, but we can invest the money from selling the house.

Option 2, wait until housing market in GTA recovers, hopefully in the near future, in that case, we could rent out the house in Calgary. we have a friend in Calgary who can help manage the rental. Personally I don't want to rent out the house in Calgary for reasons: nice house might get messed up by tenant,  and I hate to ask for help from friends.

 

So... I am stuck here, any advice is much appreciated.

[bizaro86]

I suspect the spread between your GTA house and your calgary house would still be many hundreds of thousands? Personally, I'd sell and be done with it. It isn't obvious real estate will bounce higher (it is still very high on fundamental valuations and interest rates are going up). You made a plan that works for your life, I'd stick to it and cash out the tax free gains now. 

[MikeL]

Yes, the house in Calgary is about half of the price in GTA. and you are right, I was anchoring on a higher price which made me hesitated. Thanks for the advice.

 

[Viking]

My suggestion is focus on what is best fit from a lifestyle perspective first - as a couple. Financial fit second.
 

From an investment perspective, a buddy of mine just sold a rental and proceeds just dropped into his bank account… right in the middle of a bear market. He has started scaling into S&P500 index fund. If bear market continues he will buy more. pretty good options today to redeploy the cash.

[MikeL]

Thanks Viking. That was our plan too and we should stick to it.

[SharperDingaan]

Pay your friend roughly 3-4% of the rental receipts, and buy them a case of Wine/Champaign every year.

Keep the place rented for a year, with no damages, and there's also a pair of Calgary Flames hockey tickets in it for you. 

 

Professional management fees would be around 7% of rental receipts. 

3-4%, plus goodies, as an attractive/reasonable saw-off.

 

SD  

[MikeL]

Problem is there's no guarantee of no damages if rent out. management fee is not a concern, it's the damage to the property I am worrying about.

[Rod]

Imagine your wife didn't have the job in Toronto and you didn't own the house in Toronto. Would you buy that house now to give her somewhere to live so she could start the new job there instead of staying in Calgary? I doubt it.

[LC]

Is moving to Calgary and renting the spot in GTA out of the question?

[WayWardCloud]

Since you're planning to invest the proceeds you should consider the RE price drop RELATIVE to the stock market price drop during the same time period. Yes you are selling your house for a bit less but also buying stocks for cheaper with the proceeds. You might actually come out ahead.

 

No one can predict the future anyway and a RE rebound to new ATH is not certain so move on with your life plans and be happy. Just providing the above logic to soften the psychological blow of not selling at the very top which almost never happens anyway

[SharperDingaan]

6 hours ago, MikeL said:

Problem is there's no guarantee of no damages if rent out. management fee is not a concern, it's the damage to the property I am worrying about.

 

Sorry, but in the real world there are no guarantees.

You currently have two houses, and can only live in one of them - sell at an opportunity loss, or learn to live with the possibility of damages.

 

SD

[Pedro]

If it was me I'd do option 1. Family first -always.  I'd want to be  close  as possible to my  family and I'd  never look back at what became of the toronto real estate prices.
Option 2 is all trying to time the toronto housing market and no-one knows what will happen. 
Good luck!


 

 

[Viking]

2 hours ago, Pedro said:

If it was me I'd do option 1. Family first -always.  I'd want to be  close  as possible to my  family and I'd  never look back at what became of the toronto real estate prices.
Option 2 is all trying to time the toronto housing market and no-one knows what will happen. 
Good luck!

An important question to answer is if you ever want to buy back in Toronto (in 3 or more years time). If you sell in Toronto today there is a very good chance that prices could run away from you. Eyes wide open  

[crs223]

5 hours ago, Viking said:

If you sell in Toronto today there is a very good chance that prices could run away from you. Eyes wide open  

Even the participants have FOMO! 

[bizaro86]

10 hours ago, Viking said:

An important question to answer is if you ever want to buy back in Toronto (in 3 or more years time). If you sell in Toronto today there is a very good chance that prices could run away from you. Eyes wide open  

It's also possible that prices in Calgary could materially outperform Toronto. Momentum in the most recent decade is in Toronto's favour, but Calgary has outperformed in the past, has a way lower starting valuation on every relevant metric, and has high oil and gas prices going for it.

[Viking]

4 hours ago, bizaro86 said:

It's also possible that prices in Calgary could materially outperform Toronto. Momentum in the most recent decade is in Toronto's favour, but Calgary has outperformed in the past, has a way lower starting valuation on every relevant metric, and has high oil and gas prices going for it.

My guess is Calgary prices will outperform Toronto moving forward - especially if the spike in oil prices is sustained. The trick is to think through the different potential outcomes so that regardless of what happens in the future you (and your spouse) are in a good place mentally (and financially) with the decisions you have made.