Sotheby's
International Realty Canada, Brokerage Apr 15, 2014
Toronto Real Estate Market Update - April, 2014
Posted by: louisa
Hello again.
Whatever your persuasion - Passover, Easter, The Goddess, have a wonderful Friday off work! Let’s hope the sun shines brightly on us all, that we can spend it with the folk we love, and not worry too much about what we cannot control!
The boundaries for desirable neighbourhoods in Toronto are spreading outward as the central core becomes unaffordable to many. In staging, neutrality is key. With the advent of social media and the popularity of HGTV, buyers today have high expectations. Most start their search on the internet and will by-pass a house if the photos are either not present or are not professionally taken.
Sellers are encouraged and wise to stage. I see the same paintings, bedspreads, couches, easy chairs and dining room sets in house after house. It’s hard for a buyer to see beyond the design, décor and placement of furniture, and proper staging helps point buyers to a new normal.
In the Junction, a beautifully staged, somewhat updated small attached 2 bedroom 1 bathroom, unfinished basement freehold house with its yard backing onto the railway tracks just sold in 6 days for $531,000: 106% of asking. The previous sale, 20 days on the market in December 2012 was for $415,000: 97 % of asking.
A small semi in the Davisville/Bayview area sold last month for $690,000, (106% of asking) tenanted. Few upgrades since its last sale in May 2006 for $430,000 (103% of asking).
Even back then, before the major increase of prices in 2007, Davisville/Bayview showed all the signs of desirability. Although it is an area you would need a car for, there are great shops and restaurants on that Bayview strip, a quick drive down the Bayview extension to downtown, but most of all, it is in a sweet school cache: Davisville Jr., Hodgson Sr. and North Toronto High School. It used to be said that schools became great because of the level of parent involvement. With prices the way they are, two incomes are usually needed - so will that still hold true?
I can tell you without a doubt that who you are, how wonderful a neighbour you will make, that you will not do anything to change the house once you take possession etc. etc. matters not a jot to the seller. The winner is the one with the highest offering price the right closing and no conditions.
In the event of four or more offers there will be, in industry parlance, one “extraordinary” offer that will win the day. Now we are seeing offers as much as $200,000 over asking. And these come about not because the agent necessarily underprices, (and it is very clear when they do) but because market value today has little bearing on a past sale comparable.
There will not all of a sudden be an unprecedented amount of homes coming on the market, so waiting it out may take years, or an apocalypse.
To facilitate “clean” (i.e. no conditions) multiple offers, sellers will have a pre-listing inspection done on their house by a well-known home inspection company. Buyers must bear in mind that these inspections are done for the benefit of the seller, and the buyer will be warned that in the case of the seller brokerage’s Schedule “B” which is attached to the listing:
“The Buyer acknowledges and accepts that any inspection provided by the Seller or Listing Brokerage was ordered by the Seller for the Seller’s own purposes. Any reliance on the report is at the buyer’s own risk. The Buyer agrees to indemnify and hold harmless the Seller, the Listing Brokerage, and the Sales Representative for any errors, omissions and representations expressed or implied, contained in the home inspection.”
The truth is for any purchase, the inspector can only find what is visible. They cannot light a fire in the fireplace, they cannot see the mould behind the drywall in the basement, or the water pipes leading into a home from the city. Our infrastructure is old...a plumbing inspector putting a snake into the pipes may cause the pipe to crumble. Who’s responsible for that damage? Want to try out the washing machine or dishwasher during a condo inspection, who’s responsible for flooding? Which brings up the subject of hidden mould. Thanks to Mike Holmes, infra-red equipment is becoming more common amongst home inspectors. Some charge a good deal more to use it. I’m not sure why as it takes less than 15 minutes to check the entire house. I have never seen an infra-red inspection as part of the inspection report offered by the Seller. Why don’t Buyers have a pre-offer inspection done when they plan to spend a minimum of half a million on a house? Sometimes a buyer can put offers in on 6 homes. I heard of one buyer who had tried 13 offers. So this can prove costly. Is it better then to buy a house that no-one else wants, that has been on the market for a while?
The main reason for this increase has to be low borrowing costs. When the real estate market collapsed in 1989, a 5 year fixed cost 12.25. Can the current rate of 2.95% go up so as to cause a total collapse in the economy and therefore, the housing market?
There are still buyers out there who are willing that crash, longing for it, even hoping for the end of civilization as we know it, thus bolstering a belief that they have maybe held for the past several years that the real estate market is a bubble, and is due for an imminent pop. Many of these first time buyers have been pushed out of the market. Or are having to settle for way less.
TD is constantly putting out headlines: “ Canadian prices to be flat for the next 10 years” Try telling that to a buyer who has lost a bid when one of 6 on a small semi at St. Clair and Oakwood...”Toronto house prices could slip in 2015” Does the use of the word “could” make that particular sooth sayer look plausible when predicting in the future? “Canadian housing overvalued”: Tell that to the buyer who is relocating from London UK where he has just sold a one bedroom flat, with a 47 year lease for over a million pounds....
Scotiabank, in their March 28th news release sees a Global economic recovery, an improving economic outlook and the recovery in global property market becoming more entrenched. Weaker job growth,lower housing affordability, and a widening gap between the cost of owning vs renting. Let’s take a look at this:
At Avenue Rd and St Clair, a very pretty two bedroom, 1 bathroom, no parking unit recently sold for $408,000 (103% of asking) $30,000 more than the same unit sold for in September last year: (95% of asking) ) A similar sized unit leased last year for $2100.With the minimum required 10% down, that leaves an interest payment of $790.00 + $200.00 taxes + $343.71 maintenance: a total of $1283.71 with $849.00 going to your principal as opposed to into your landlord’s pocket.
Across the GTA the average sales price was $557,684 – an increase of almost 8% compared to the average reported for March 2013. The average price for the first quarter of 2014 was up by 8.5 per cent year-over-year.
C03, Oakwood /Vaughan: $560,000 C15: Bayview Village: $1,567,429 E02: Woodbine Corridor $608,250 W01: South Parkdale: $911,563
Average prices in condominiums:
C01: Waterfront: $418,097 C02: Yonge/St.Clair $723,978 C07: Willowdale: $374,960 E08: Guildwood: $283,090 W06: Mimico: $370,726
Don’t see what you are looking for? Call me at 416-347-9131. If nothing else, I’d love to hear how you are doing.
For specificities, look here in March’s Home Price Index
As always, thank you for your support and referrals, I couldn’t do it without you.
Louisa
Whatever your persuasion - Passover, Easter, The Goddess, have a wonderful Friday off work! Let’s hope the sun shines brightly on us all, that we can spend it with the folk we love, and not worry too much about what we cannot control!
The boundaries for desirable neighbourhoods in Toronto are spreading outward as the central core becomes unaffordable to many. In staging, neutrality is key. With the advent of social media and the popularity of HGTV, buyers today have high expectations. Most start their search on the internet and will by-pass a house if the photos are either not present or are not professionally taken. Sellers are encouraged and wise to stage. I see the same paintings, bedspreads, couches, easy chairs and dining room sets in house after house. It’s hard for a buyer to see beyond the design, décor and placement of furniture, and proper staging helps point buyers to a new normal.
In the Junction, a beautifully staged, somewhat updated small attached 2 bedroom 1 bathroom, unfinished basement freehold house with its yard backing onto the railway tracks just sold in 6 days for $531,000: 106% of asking. The previous sale, 20 days on the market in December 2012 was for $415,000: 97 % of asking. A small semi in the Davisville/Bayview area sold last month for $690,000, (106% of asking) tenanted. Few upgrades since its last sale in May 2006 for $430,000 (103% of asking).
Even back then, before the major increase of prices in 2007, Davisville/Bayview showed all the signs of desirability. Although it is an area you would need a car for, there are great shops and restaurants on that Bayview strip, a quick drive down the Bayview extension to downtown, but most of all, it is in a sweet school cache: Davisville Jr., Hodgson Sr. and North Toronto High School. It used to be said that schools became great because of the level of parent involvement. With prices the way they are, two incomes are usually needed - so will that still hold true? Navigating this current market, in search of the perfect home in just the right neighbourhood:
The unfortunate fact is that what is the right house for you will undoubtedly be the right house for other buyers. This leads to multiple offers, and condos are not exempt from this. I was asked twice last month if my buyer would cross out the condition on the buyers’ lawyer reviewing the status certificate… I find myself on the wrong side of the table (i.e. I am representing buyers) on average once a week. Probably my over active imagination, but I see $$s glinting in the sellers eyes, and a self-satisfied smile from the sellers rep. who for once finds herself in a position of power...she/he knows that at the end of the evening they will be receiving a pay check!I can tell you without a doubt that who you are, how wonderful a neighbour you will make, that you will not do anything to change the house once you take possession etc. etc. matters not a jot to the seller. The winner is the one with the highest offering price the right closing and no conditions.
In the event of four or more offers there will be, in industry parlance, one “extraordinary” offer that will win the day. Now we are seeing offers as much as $200,000 over asking. And these come about not because the agent necessarily underprices, (and it is very clear when they do) but because market value today has little bearing on a past sale comparable.
There will not all of a sudden be an unprecedented amount of homes coming on the market, so waiting it out may take years, or an apocalypse.
To facilitate “clean” (i.e. no conditions) multiple offers, sellers will have a pre-listing inspection done on their house by a well-known home inspection company. Buyers must bear in mind that these inspections are done for the benefit of the seller, and the buyer will be warned that in the case of the seller brokerage’s Schedule “B” which is attached to the listing:
“The Buyer acknowledges and accepts that any inspection provided by the Seller or Listing Brokerage was ordered by the Seller for the Seller’s own purposes. Any reliance on the report is at the buyer’s own risk. The Buyer agrees to indemnify and hold harmless the Seller, the Listing Brokerage, and the Sales Representative for any errors, omissions and representations expressed or implied, contained in the home inspection.”
The truth is for any purchase, the inspector can only find what is visible. They cannot light a fire in the fireplace, they cannot see the mould behind the drywall in the basement, or the water pipes leading into a home from the city. Our infrastructure is old...a plumbing inspector putting a snake into the pipes may cause the pipe to crumble. Who’s responsible for that damage? Want to try out the washing machine or dishwasher during a condo inspection, who’s responsible for flooding? Which brings up the subject of hidden mould. Thanks to Mike Holmes, infra-red equipment is becoming more common amongst home inspectors. Some charge a good deal more to use it. I’m not sure why as it takes less than 15 minutes to check the entire house. I have never seen an infra-red inspection as part of the inspection report offered by the Seller. Why don’t Buyers have a pre-offer inspection done when they plan to spend a minimum of half a million on a house? Sometimes a buyer can put offers in on 6 homes. I heard of one buyer who had tried 13 offers. So this can prove costly. Is it better then to buy a house that no-one else wants, that has been on the market for a while?
Sold Statistics from the Toronto Real Estate Board
This March, there were 8,081 sales across the GTA. This represents an increase of 7.2% compared with March 2013. This number boosted the number of sales for the first quarter, bringing an increase of 3% compared to last year. To find out how this looks, click here for TREB’s March Housing Charts.The main reason for this increase has to be low borrowing costs. When the real estate market collapsed in 1989, a 5 year fixed cost 12.25. Can the current rate of 2.95% go up so as to cause a total collapse in the economy and therefore, the housing market?
There are still buyers out there who are willing that crash, longing for it, even hoping for the end of civilization as we know it, thus bolstering a belief that they have maybe held for the past several years that the real estate market is a bubble, and is due for an imminent pop. Many of these first time buyers have been pushed out of the market. Or are having to settle for way less.
TD is constantly putting out headlines: “ Canadian prices to be flat for the next 10 years” Try telling that to a buyer who has lost a bid when one of 6 on a small semi at St. Clair and Oakwood...”Toronto house prices could slip in 2015” Does the use of the word “could” make that particular sooth sayer look plausible when predicting in the future? “Canadian housing overvalued”: Tell that to the buyer who is relocating from London UK where he has just sold a one bedroom flat, with a 47 year lease for over a million pounds....
Scotiabank, in their March 28th news release sees a Global economic recovery, an improving economic outlook and the recovery in global property market becoming more entrenched. Weaker job growth,lower housing affordability, and a widening gap between the cost of owning vs renting. Let’s take a look at this:
At Avenue Rd and St Clair, a very pretty two bedroom, 1 bathroom, no parking unit recently sold for $408,000 (103% of asking) $30,000 more than the same unit sold for in September last year: (95% of asking) ) A similar sized unit leased last year for $2100.With the minimum required 10% down, that leaves an interest payment of $790.00 + $200.00 taxes + $343.71 maintenance: a total of $1283.71 with $849.00 going to your principal as opposed to into your landlord’s pocket.
From TREB’s president, Diane Usher talking about March’s statistics:
“Sales activity in the GTA accelerated last month. Compared to last year, a greater number of buyers found affordable home ownership op “ns, as evidenced by sales growth for all major home types. Against this backdrop, however, overall inventory at the end of March remained lower than last year. This means competition between buyers increased, which is why the average selling price continued to climb,” said Ms. Usher.Across the GTA the average sales price was $557,684 – an increase of almost 8% compared to the average reported for March 2013. The average price for the first quarter of 2014 was up by 8.5 per cent year-over-year.
Here are the average prices for March, 2014:
Average in freehold homes:C03, Oakwood /Vaughan: $560,000 C15: Bayview Village: $1,567,429 E02: Woodbine Corridor $608,250 W01: South Parkdale: $911,563
Average prices in condominiums:
C01: Waterfront: $418,097 C02: Yonge/St.Clair $723,978 C07: Willowdale: $374,960 E08: Guildwood: $283,090 W06: Mimico: $370,726
Don’t see what you are looking for? Call me at 416-347-9131. If nothing else, I’d love to hear how you are doing.
For specificities, look here in March’s Home Price Index
As always, thank you for your support and referrals, I couldn’t do it without you.
Louisa