A late-January deep freeze in Toronto didn’t stop potential buyers from traipsing through two weekend open houses to see a dilapidated three-bedroom dwelling near Dupont Street and Dovercourt Road.
Apparently house hunters were not at all put off by the marketing video that showed workers carting away mattresses and shoveling out detritus from the detached house with two-car parking.
The blizzard barreling down on the city on the night set for reviewing offers did prompt listing agent Davelle Morrison to move the bidding to the following night.
Ms. Morrison was heading back from Rwanda on a flight that was diverted to Ottawa. The client was also stuck out-of-town and buyers’ agents, meanwhile, were calling her office to ask if bidding was still on.
But a change of date and Snowmaggedon still didn’t deter 10 potential buyers from vying for the chance to purchase 404 Delaware Ave.
The house sold for $1,059,969 – or $260,969 above the asking price of $799,000, says Ms. Morrison of Bosley Real Estate Ltd.
The agent says she set an eye-catching asking price in order to attract attention to the fixer-upper.
The home’s location in a trendy west-end neighbourhood and its poor condition made it attractive to builders, she says.
Listings have been slim so far this year, she says, and buyers don’t have a lot to choose from.
“I think whatever’s on the market now gets a lot of attention. The demand is definitely there.”
The asking price also put it in the segment that continues to thrive in a market that has cooled off in higher price brackets.
For the most part, properties listed at $1.2-million and above don’t attract the same intense interest, she says.
Sales in the Greater Toronto Area remained essentially flat in January, with a 0.6 per cent rise from the same month last year. New listings rose 10.5 per cent from January of 2018, the Toronto Real Estate Board reported.
The average price in the GTA edged up 1.7 per cent last month to $748,328 from the $735,874 recorded in the same month last year.
The condo segment once again outpaced the market for single-family dwellings. The average condo price in the GTA increased 7.9 per cent to $548,176 last month. The average detached home price in the GTA dipped 2.8 per cent to $941,488.
Many first-time buyers are striving to stay under the $1-million mark so they are not required to come up with a 20 per cent down payment.
“There’s a lot more competition under $1-million,” Ms. Morrison says.
Still, east-end neighbourhoods that are “hip, cool and close to transit” are drawing lots of buyers, she says, pointing to Leslieville as a prime example.
One reason that inventory is so scarce is that owners with an existing property find it too expensive to move, she says.
Between land transfer taxes and other expenses, homeowners can’t justify the cost of trading up.
Move-down buyers, she says, are also put off by the current market dynamics.
In many cases, homeowners with a view to trading down are empty nesters and retired people with large houses. The would like to move to a condo, but the rise in prices has far outpaced that of single-family dwellings.
“They would have to pay $900,000 or $1-million to get the size of condo they would want to live in. They’re not willing to do that,” she says. “It creates a stand-off in the market.”
Investors are still interested in purchasing condo units and houses in order to rent them out, Ms. Morrison says.
She says the whipsaw motion in equity markets in 2018 is spurring even more investors to put their assets into real estate.
“The stock market isn’t going to cut it any more.”
While sales data shows buyers are shying away from preconstruction condo units compared with their enthusiasm in previous years, people are still willing to purchase existing properties.
Ms. Morrison says prices for unbuilt units are lofty compared with finished units and she advises the buyers she works with to exercise caution.
“There are too many variables,” she says. “They’re not looking at preconstruction.”
Ms. Morrison recently sold a duplex near St. Clair Avenue West and Old Weston Road for $850,000 after it failed to sell last spring. An agent who had remembered the listing phoned her to ask if the owner was still interested in selling.
Ms. Morrison says the sellers of another duplex on the same street turned down an offer for $1,075,000 on offer night. That property is currently listed with an asking price of $1,049,000.
Ms. Morrison says both dwellings are suitable income properties, but people buying a house in order to rent it out tend to be very educated about market values.
“Investors are not emotional,” she says. “It’s all about the numbers. If it’s overpriced they don’t bother.”
In the 905 area east of Toronto, real estate agent Shawn Lackie of Coldwell Banker R.M.R. Real Estate says listings and sales are down, but prices are up so far this year.
Mr. Lackie says potential buyers are rolling around but the lack of listings does dissuade some people from looking seriously at this time of year.
“The selection is probably a little bit limited,” he says. “I think there are a lot of people floating around right now trying to figure out what happens next.”
Still, he says, keen house hunters are out 12 months of the year.
“The serious buyer is looking.”
In parts of Ontario’s Durham Region – which includes such areas as Ajax, Whitby and Bowmanville – multiple offers still erupt for properties that are priced well and move-in ready.
“They don’t want to do any work whatsoever,” Mr. Lackie says.
Another trend he has noticed is that buyers are favouring year-round waterfront properties in areas such as Peterborough, Lindsay and the Kawartha Lakes.
Mr. Lackie says the ease of telecommuting is encouraging people to work at home. Instead of owning a suburban house and a cottage, they are consolidating and buying an all-season house on the water in an area farther out from the city.
“I’ve seen a lot of it already.”
Mr. Lackie says real estate prices and property taxes are lower in the areas north of Durham.
As areas develop with more amenities and big box stores, people are drawn away from the core.
“Boom – all of a sudden the commute becomes immaterial.”
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