Toronto real estate market picks up after lull
Home buyers in Toronto and some of the surrounding areas appear to be testing their mettle again after spending a few weeks on the sidelines.
It’s too soon to tell if a flurry of sales signals a trend with staying power or if some buyers simply need to move on with their lives, but the action – especially at the high end – suggests some resilience in an uncertain real estate market.
Janet Lindsay, a real estate agent with Chestnut Park Real Estate Ltd., recently listed for sale 253 Russell Hill Rd., a six-bedroom house in the posh central enclave of South Hill. Within three days the first offer landed, Ms. Lindsay says. Two days after that, the second and prevailing offer arrived and the house sold for $100,000 above the asking price of $3.65-million.
“More appointments were being booked as we waited for the certified cheque,” Ms. Lindsay said. About 30 potential buyers attended showings during the few days the house was on the market.
July and August typically offer a bit of a lull between the more vigorous spring and fall markets, says Matthew Regan, a real estate agent with Royal LePage Real Estate Services, but he has noticed a recent bounce in Mississauga and Oakville, where he does most of his business.
“In the past couple of weeks, I’m seeing life.”
Mr. Regan has been keeping an eye on a house listed in the coveted Lorne Park area of Mississauga in the fall of 2016 with an asking price of $3.5-million. The property rode the fall market into an even better spring market and into the summer without selling, Mr. Regan says. Last week, the property sold – without the owners ever cutting their asking price, he says.
Mr. Regan says sellers have mainly been falling into two camps – those who have a reason to sell and those who are just testing the market. The former have tended to sit and wait while the latter have been pulling their houses off the market if they don’t get the amount they’re looking for.
“The other kind of seller was the kind who just went fishing – cast a line and said, ‘I’ll see if I get my fish.’ They got tired.”
Mr. Regan cites another example, where a house was listed in the late spring in the popular River Oaks neighbourhood of Oakville with an agent in Mr. Regan’s office. The asking price of $1.198-million tends to draw buyers to the coveted school district.
“That’s a sweet spot because $1.2-million is affordable for a lot of buyers in Oakville,” Mr. Regan says.
In the middle of June, about 32 properties were listed for sale in the pocket.
“Nothing was moving.”
Recently, the house sold for $1.1-million. The sellers were happy, Mr. Regan says, because they still received more than they would have if they had listed last summer. When Mr. Regan looked at the house in the fall, he estimated it might sell for $950,000 or $975,000.
The homeowners may have received more in the early spring, he says, but it’s very difficult to time the market perfectly.
“In February or March, they might have sold it for more money, but that would have been luck – pure luck.”
In April, the Ontario government announced new measures aimed at cooling an overheated market in the Greater Toronto Area and beyond. Jittery buyers became fearful about buying in an uncertain market while listings surged as some sellers rushed to cash out.
In May, the market stalled as players on both sides tried to figure out the impact the rule changes would have.
Mr. Regan says listings in River Oaks are still sitting, but one sale may lead to others because the pocket now has a new benchmark price. Also, prospective buyers can see that other house hunters are stepping forward.
“They’ve elected to buy a house where no one was buying a house for a month or two months,” he says.
Mr. Regan says the sellers who were just fishing for a high price were diluting the market. As they drop out and buyers return, he hopes to see a healthy market balance.
“What isn’t a healthy market is a pool of sellers just sitting and buyers scratching their heads.”
He expects inventory to rise in the fall as usual at that time of year, but he doesn’t predict a surge.
“The people who got tired of trying for an unrealistic number, it’s unlikely they’ll go back in the fall,” he says.
He also doesn’t expect a repeat of the zaniness of the spring, with prices climbing at warp speed. Buyers became fed up with bidding wars, he says, and few agents are still setting artificially low asking prices in the hopes of sparking one.
“That strategy is gone.”
He predicts that most agents will list houses with an asking price close to the market value and accept offers any time.
For buyers, he expects that “old school” way of negotiating a purchase to come as a relief.
“You don’t have to panic,” he tells buyers, “like in the spring, when a half-decent house would have been gone in 48 hours.”
Elli Davis of Royal LePage Real Estate Services Ltd. says she has fewer listings than normal at the moment and she is encouraging potential sellers to list after this weekend’s holiday.
“After the long weekend in August, I almost find like that’s the turn,” she says. “The buyers are there anyway.”
She recommends that homeowners set a reasonable asking price for their location and style of house. In midtown Toronto, she rarely holds back offers now, but on occasion a house merits that approach.
“Sellers have to be realistic. It’s a one-by-one conversation. No two listings are the same.”
Ms. Davis recently sold a small, one-bedroom condo unit in the Distillery District. The condo, in the $350,000 range, sold for $25,000 above asking.
She listed the unit on a Thursday without an offer date, but when she saw the demand, she set a deadline for the following Monday. The sellers received four offers.
“It was the right move because they certainly got more on the Monday than they would have on the Friday.”
She says the condo needs updating, but a lot of people are looking for an older unit to renovate.
After the long weekend, she plans to list a three-bedroom condo unit at 110 Bloor St. W. with an asking price just under $2-million. The 2,600-square-foot unit is in original condition, which is rare in a 35-year-old building.
“People like that. If it’s going to be renovated, just do it all at once and make it to their own taste.”
Ms. Davis does know of some houses that have been sitting on the market, but she believes some sellers are too optimistic. If they refuse to budge from their asking price or plan to retreat and list again in the fall, she predicts they will have less success. She would do the opposite – stay on the market and trim the price, she says.
“I wouldn’t wait until after Labour Day. I’m putting properties on now because there’s not much.”
Source: Globe and Mail
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