Spring Market Begins
This month past was the start of spring buying–and new beginnings. Despite the downturn, some neighborhoods are sizzling but the deals are still available in others.
Brenda McMillan, National Post
March in Toronto: A Victorian house close to College Street garners 11 offers and sells over asking. You’re thinking, “Ah, yes, the good old’ days.” But the March when this house sold was not last year –it was last month.
Spring has hit the Toronto real estate market and properties are selling faster than hot dogs at a baseball game — but only some homes in selected areas. I asked real estate agents about what’s hot, hot, hot and what’s not, and got a few surprises.
Jonathan Amantea of Sutton Group says the market has picked up over the past few weeks and cites a home in the Roncesvalles area as an example of a property that sold immediately. Listed for $599,000, the Victorian semi was snapped up in two days for slightly over asking because it was a prime example of a solid, well-priced, well-maintained home on a pretty street in a desirable area. It had few competitors and many interested buyers.
The same thing happened with an updated, well-kept Victorian row house on Andrews Avenue in the Bathurst and Dundas area. Listed for $390,000, it sold for more than that in less than two weeks. David Bettencourt, also at Sutton Group, has a similar story about a solid three-storey semi on Euclid Avenue that was listed for $589,000. It sold in a week for substantially more than the asking price. Has the market suddenly turned around?
The answer depends on the neighborhood. The buyers fuelling the market right now are mostly first-timers. New to home owning, many are choosing condominiums because they are attainable with a minimum down payment. Loft conversions such as the Candy Factory Lofts on Queen just north of Liberty Village have a strong appeal and often sell immediately. But many first-time buyers are seeking single-family houses in good-but-affordable neighborhoods.
Farrell Macdonald of Coldwell Banker Terrequity Realty says that Leslieville has seen a lot of turnover. Homes with parking that are well maintained and well-kept by long-term owners offer the best value because these sellers can accept a reasonable price and still preserve their equity. Newbies are attracted to family-friendly neighborhoods like Leslieville, and while they will buy a home that needs a few cosmetic changes, Mr. Macdonald says that first-time buyers “have no stomach for huge renos and fixer-uppers.” Those properties are either snapped up quickly, such as one on Harriet Street, a $279,000 renostarved detached bungalow nestled between Riverdale and the Beach that sold in two days, or they hang around forever like a dateless guy at the prom.
Mr. Macdonald describes Toronto real estate conditions today as more “balanced.” While only a few short months ago, there were unconditional offers and bidding wars galore, today the process is more thoughtful. “It feels like real estate should feel, with agents working harder and together, buyers visiting (prospective homes) more than once and time for home inspections and financing.” If prospective purchasers need even more of an incentive, there is one: interest rates.
At their lowest since the Beatles made their debut in Toronto, they are a powerful reason to buy now. According to Kristian Harris of Monstermortgage.ca, five-year mortgages are sale priced at 4% fixed and 3.3% variable, and are a boon to people buying or refinancing. He says that many new buyers are pre-approved in the fall waited and are now jumping in to the market at substantially lower rates.
But not all properties are bought by first-time buyers. The homes on Euclid and in Roncey that sold so quickly attracted people who were trading up from smaller places. These types of buyers like neighborhoods such as the Beach, Riverdale, Cabbagetown, South Annex and Roncesvalles for lifestyle reasons and because the homes are attractive and mostly updated. Properties in these areas have not dramatically dropped in price because there are relatively few with strong appeal on the market.
According to our agents, people are shopping for well-maintained, updated homes with parking that show well and are priced fairly. The trouble is the people living in those homes are not motivated to list, as they are concerned their property will linger on the market and become stigmatized. As a result, there are not enough quality homes available for under $700,000. But the good ones sell fast. Really fast.
So what is a buyer to do? Mr. Bettencourt counsels patience: “There are so few good Victorian houses that there is more demand than supply so it’s a matter of being patient until the right house comes along.”
What is available is a plethora of unattractive houses in less-desirable areas, and beautiful carriage trade homes in the best neighborhoods. Rosedale and Forest Hill have bargains for buyers who have a million, or millions, to spend. Those homes still sell, but not quickly in most cases.
The “dogs” aren’t selling quickly, either. Mr. Amantea says, “It is possible to get amazing deals on less-than-perfect homes in good areas that have been on the market for a long time because the vendors are motivated.” And properties abound for a little more than $200,000 if you want to live in 416-far-east or 416-far-west.
Do the real estate agents have words of wisdom for buyers and sellers and those considering jumping into the market this spring? Mr. Macdonald says, “Nobody is throwing money around like they used to. Buyers and sellers will have to be patient and realistic about timelines.”
Mr. Amantea says, “Mortgage rates are probably as low as they will go. This is an excellent time to buy.” Mr. Bettencourt is encouraging: “There are more buyers and more demand than there are properties [for sale] in the Annex and downtown core. You will have many interested buyers.”
The current, more-balanced market is nothing new. Buying and selling used to be a “thoughtful” process with due consideration given to each and every detail. Purchasers see this as a great advantage, agents see it as more work and vendors are nervous. Condos and solid homes in good neighborhoods are hot. Everything else is not, yet, but spring is here and anything can happen with time and patience.
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