What’s a reasonable time to own a home?

On average homeowners sell their home within seven years of buying and that’s increasing. A number of sellers fall short of this average. Some sell within one to two years of buying for various need-based reasons, such as:

  1. Financial stress due to illness, job loss or being too stretched,
  2. They dislike like the neighbourhood once there,
  3. The house turns out to be too small or too large.
  4. Job relocation, spousal discord, and more.

So outside of the need to sell, what is a good buying strategy?

Our experience indicates that, at minimum, 5 years is a reasonable time to hold on to a home before selling?

As an example, the chart below paints a picture of what has happened to the overall average price of homes in the Niagara Region from 2003 through 2011.

Regional Average Home Prices

No. Years Ago

Year

Avg. Price

% Change

9

2003

$155,872

 

8

2004

$172,835

10.88%

7

2005

$187,317

8.38%

6

2006

$199,995

6.77%

Last 5 Years

5

2007

$208,671

4.34%

4

2008

$210,981

1.11%

3

2009

$215,005

1.91%

2

2010

$225,215

4.75%

1

2011

$231,180

2.65%

 

Some neighbourhoods in more recent years have no doubt experienced some decline in prices. Yet the overall average for the last 5 years has continued to stay positive (see 2007 through 2011). As well, the chart indicates an average increase of about 2.95% per year for the last 5 years, and an overall increase of 14.75%.

The 5-Year Buying Plan Continues to Work

So even in a market of fewer sales and lower appreciation than in prior years, the idea of holding onto a home purchase for a minimum of 5 years continues to be a good strategy.

 

Source: The information in the chart has been sourced from the Niagara Association of REALTORS®. For Dec. 2011 numbers are not available; the chart shows a 12-month average to the end of November 2011.

 

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