May 2016 Market Stats: Infographic & Report

Following is TREB’s market report for May 2016:

Toronto Real Estate Board President Mark McLean announced that there were 12,870 home sales reported through TREB's MLS® System in May 2016.

This result represented a new record for the month of May and a 10.6 per cent increase over the same period last year.

In contrast, the number of new listings was down over the same time frame by 6.4 per cent.

The decline in listings was experienced in both the low-rise and condominium apartment market segments.

"Whether we're talking about existing homeowners or people looking to purchase for the first time, there is no shortage of buyers in the marketplace today. So, while the record number of home sales through the first five months of 2016 is not necessarily surprising, it does sometimes mask the larger story in the GTA: the shortage of listings, which has resulted in strong upward pressure on home prices," said Mr. McLean.

The MLS® Home Price Index Composite Benchmark was up by 15 per cent year-over-year in May 2016.

Similarly, the average selling price for all home types combined was up by 15.7 per cent over the same period.

Low-rise home types, which remained in short supply in many GTA neighbourhoods, experienced the strongest price growth.

"Widespread competition between buyers of singles, semis and townhouses across the GTA has underpinned the robust annual rates of price growth experienced so far this year. With this said, however, it is also important to understand that tighter market conditions for condominium apartments have resulted in price growth well above the rate of inflation in this market segment as well," said Jason Mercer, TREB's Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

Liberty Village, Givins/Shaw, And A Lesson In School Catchment Changes

 

How would you feel if you purchased a home in a particular neighbourhood specifically because of the school catchment, only to find later that your child would actually be going to a different (arguably less desirable) school?

That's basically what's happened to a bunch of young families who live in Liberty Village.

Up until April of this year it was understood that Liberty Village was part of the Givins/Shaw catchment.

About halfway through the month though, a letter went out informing everyone of a proposed redistricting. My family got the notice because we live in the catchment (my oldest daughter is starting kindergarten at Givins/Shaw in September, and her younger sister will be following suit in another couple of years).

The letter contained a poorly detailed map showing where the new boundaries would be; the map was vague and had a lot of people unsure of whether or not they’d be affected.

None of us got any real answers until the public meeting that was held a couple of weeks later in early May.

I was at that meeting, and what it all boils down to is this:

Givins/Shaw school is over capacity now and will certainly be unable to accommodate all of the students that are entering the system over the next bunch of years. The school board took a look at the neighbouring schools, and saw that the Queen Victoria school in Parkdale was well under capacity. So, it made sense for them to propose a rejigging of the catchment boundaries and send a chunk of the population over to Queen Victoria. Liberty Village will make up the bulk of that chunk.

Are parents in Liberty Village upset with this news? Without a doubt.

A bunch of Liberty Village parents were there at the meeting in May to voice their opinions about the proposed redistricting and about how all of this has been handled.

We heard from one father who's now going to have two sons in different schools at the same time. The logistics of dropping off and picking up his boys is going to be a daily hassle, and it’s going to significantly alter their after-school routine (which currently consists of quality-time spent in the Givins/Shaw area).

We heard from another parent who said their home search was based primarily around buying into the Givins/Shaw catchment. If they had known that the catchment was going to change, they never would've bought in Liberty Village.

From my perspective as a realtor, it's this last point that interests me most.

School catchment is usually at the top of the list of must-haves & deal-breakers when a young family shops for a new home. It’s certainly a big part of my focus when I’m working with buyers who fit into this category.

And while I’ve seen catchments get tweaked in the past (some clients of mine got a helluva deal in Roncesvalles last year, partially because of this catchment change), it’s rare to see an entire neighbourhood get redistricted the way that Liberty Village is going to be.

“Shouldn’t residents in Liberty Village have seen this coming?” I’ve heard some people say. “How can you realistically think that there wouldn’t eventually be some sort of change in such a quickly-developing area?”

Fair enough. But I think the fact that the parents weren’t notified of anything beforehand is one of the hardest things to swallow here.

And I think a number of parents assumed that other measures would’ve been taken.

A few alternative solutions were brought up by parents at the meeting: Why not build a new school in (or near) Liberty Village? What not rent space from the Artscape building on Shaw St? Why not take over the Señor Santos Catholic School at Ossington and Osler? Why not build an additional storey onto the current Givins/Shaw building? Why not consider adding portables at Givins/Shaw?

Many parents wondered why the TDSB didn’t start planning for all of this sooner; didn’t they see that the demographics in Liberty Village showed an increasing number of families?

The TDSB’s answer to this last question was simple: “We didn’t anticipate that families would be living in condos.”

Honestly, I think a lot of people didn’t anticipate it either. With the prices of freehold homes at such a high though, condo-living has become a much more viable option for many.

And the numbers are there to prove it.

While Liberty Village is home to plenty of young professionals (singles and couples), there’s no denying that families also make up a significant part of the population. Just take a look a this Toronto Star article from January 2016.

As it stands now, the board is reviewing the proposed redistricting and taking into account the feedback that was provided by parents at the meeting in May. We should have an update in the next couple of weeks about how the changes will be implemented.

It's important to note that not all children in Liberty Village will be going to Queen Victoria; the proposal outlines a set of criteria where certain children will be attending Givins/Shaw.  You can read the latest news about the proposal/review on the TDSB website here.

Regardless of the specifics, the catchment boundaries are changing in September 2017 and Liberty Village is going to be affected by the change more than anyone.

Going forward, this will hopefully serve as an example (to school boards, housing developers, and parents alike) that rapidly growing neighbourhoods/areas are subject to change, and plans need to be set in place for how to handle a growing school population. Other areas in the city have already done this, so there is certainly a precedent.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

April 2016 Market Stats: Infographic & Report

Following is TREB’s market report for April 2016:

Toronto Real Estate Board President Mark McLean announced that there were 12,085 sales reported through TREB’s MLS® System in April 2016.

This result, which represented a record for the month of April, was up by 7.4 per cent in comparison to April 2015.

For the TREB market area as a whole, annual sales growth was experienced for all major home types except semi-detached houses.

In the City of Toronto, sales were down for detached and semi-detached houses as well as townhouses on a year-over-year basis.

This dip in sales in the “416” area code was due to a lack of low-rise listings.

Many would-be buyers were not able to find a home that met their needs.

“Demand remained strong for all types of ownership housing. This suggests that Canadians continue to see the value in investing in homeownership, and on May 17, I encourage all homeowners to celebrate with us on National Real Estate Day,” said Mr. McLean.

“While April’s sales result represented a new record for sales, that number could have been even higher if we had benefitted from more supply. In the City of Toronto in particular, some households have chosen not to list their home for sale because of the second substantial Land Transfer Tax and associated administration fee. The lack of available inventory, coupled with record sales, continued to translate into robust annual rates of price growth,” continued Mr. McLean.

Home selling prices continued to trend upward in April.

The MLS® Home Price Index Composite Benchmark was up by 12.6 per cent year-over-year.

The average selling price was up by 16.2 per cent.

The higher growth rate reported for the average home price, as compared to the MLS® HPI, points to a greater share of high-end home sales this year compared to last.

“As we move into the busiest time of the year, in terms of sales volume, strong competition between buyers will continue to push home prices higher. A greater supply of listings would certainly be welcome, but we would need to see a number of consecutive months in which listings growth outpaced sales growth before market conditions become more balanced,” said Jason Mercer, TREB’s Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

What A Difference A Season Makes

More than once over the course of these past few months, I've seen a house come on the market and sell for significantly more than what it was unsuccessfully listed at back in the fall/winter.

You could argue that this makes sense - that in a rising market a house should sell for more now than it would’ve 6 months ago.

Maybe, maybe not. (More on that towards the end of this blog post).

Regardless, it’s interesting to see such a scenario play out in real time with one specific property.

Here’s a breakdown of what happened with one of the houses I’m referring to:

House is listed in June 2015

Located in a very hot area in the west-end of the city.

Priced at $679,000, with a hold-back on offers.

Offer night comes and goes, and the property doesn’t sell.

They re-list the following day at $719,000, with offers welcome anytime.

After 3 more weeks without selling, they take it off the market.

Same house is re-listed in February 2016

7 months after unsuccessfully trying to sell, they’re back on the market.

Priced again at $719,000, with offers welcome anytime.

In less than 24hrs they receive 3 competing offers and the house sells for $755,000 (105% of list price).

No one wanted the house back in the summer, but by winter’s end there were three buyers tripping over each other to pay well above the asking price.

Wow! What a difference a season (or two) makes.

Does this necessarily mean that the same scenario would play out for every single house listed for sale in the Toronto real estate market right now? Is every single seller out there guaranteed to sell for significantly more if they just wait another 6 months?

Not necessarily. I’m sure there are sellers out there who did better 6 months ago than they would today, for a number of reasons; maybe they were competing with fewer similar listings than they would be today, maybe there were more buyers in the market that week for their particular house than there would be this week, etc.

On the whole though, prices are increasing and you’ll very likely pay more for a house 6 months from now. Just ask the three buyers who bid on the house in my example above.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

March 2016 Market Stats: Infographic & Report

Following is TREB’s market report for March 2016:

Toronto Real Estate Board President Mark McLean announced record TREB MLS® home sales for the first quarter of 2016 following a strong result for March transactions.

There were 10,326 sales in March and 22,575 sales in the first quarter.

The year-over-year growth rate for sales was 15.8 per cent for Q1 2016 and 16.2 per cent for March 2016.

For the TREB market area as a whole, double-digit year-over-year rates of sales growth were experienced for all major home types during the first quarter.

The positive annual growth in sales was not mirrored on the listings front.

The number of new listings entered into TREB's MLS® System during March and the first quarter were down compared to the same periods in 2015.

“At the beginning of 2016, TREB’s outlook for the year pointed to a strong possibility of a second consecutive record year for home sales. This outlook was based, in part, on upbeat consumer survey results pointing to robust home buying intentions. It is clear that these upbeat intentions have translated into record first quarter results,” said Mr. McLean.

The MLS® Home Price Index Composite Benchmark for March 2016 was up by 11.6 per cent compared to March 2015.

The average selling price for all home types combined was up 12.1 per cent year-over-year in March and 13.6 per cent in the first quarter.

“Demand was clearly not an issue in the first three months of 2016, regardless of the housing market segment being considered. The supply of listings, however, continued to aggravate many would-be home buyers. We could have experienced even stronger sales growth were it not for the constrained supply of listings, especially in the low-rise market segments. The resulting strong competition between buyers has underpinned the double-digit rates of price growth experienced so far this year," said Jason Mercer, TREB’s Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

Did There Really Need To Be 15 Offers?

Did There Really Need To Be 15 Offers? Photo

I was involved in a multiple-offer scenario last week, on a condo townhouse in the east end.

The property had a helluva view, and there was no doubt that it was going to attract plenty of interest and receive a bunch of offers.

“A bunch” ended up being an understatement.

There were 15 offers. FIFTEEN!

The property sold for 125% of the list price (it was listed at $409,000 and sold for $510,000).

With so many offers and such a high sale-to-list price ratio, you have to ask yourself, “Did they really need to under-list the property by that much?”

Couldn’t they have listed at, say, $449,000 (which would still be “underpricing” the property, albeit less drastically)?

While there was obviously one very happy “winner” on offer night, there were 14 other buyers that went home empty handed.

No doubt, some of those buyers went in offering less than $449,000. And despite submitting what they (and/or their realtor) thought was a reasonable offer, they never actually had a chance.

Couldn’t the sellers have been a bit less extreme in their pricing, and perhaps spared a handful of those hopeful buyers on offer night? Wouldn’t they still have ended up with a $510,000 sale price?

Truth be told, there’s no way to know for sure if they would’ve ended up at the same sale price (although I think they would have). Sure, it’s possible that the top offer wouldn’t have come in as high had there only been 7 or 8 offers (unlikely I think, but possible).

On a funny side note, the listing agent had made a point of saying that he felt that there was no need to put anyone through the hassle of going to get a certified cheque ahead of offer night, as it would only add undo stress and waste too many people’s time.

Okay…

But he felt it was reasonable to under-list the property by $75,000 - $100,000? He didn’t think that would result in wasting a bunch of people’s time? Ha!

Granted, the listing agent did a great job for his clients. He orchestrated a process that got them a record-high price for their property.

It’s a frustrating process though, when one happy seller and one happy buyer have to leave 14 other disappointed parties in their wake.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

January 2016 Market Stats: Infographic & Report

Following is TREB’s market report for January 2016:

Toronto Real Estate Board President Mark McLean announced Greater Toronto Area REALTORS® reported 4,672 residential transactions through TREB’s MLS® System in January 2016.

This result represented an 8.2 per cent increase compared to January 2015.

“It is clear that the handoff from 2015 to 2016 was a strong one. This is not surprising given that recent polling conducted for TREB by Ipsos suggested 12 per cent of GTA households were seriously considering the purchase of a home in 2016. Buying intentions are strong for this year as households continue to see home ownership as an affordable long-term investment,” said McLean.

The MLS® Home Price Index Composite Benchmark Price for January 2015 was up by 11.2 per cent on a year-over-year basis.

The average selling price over the same period was up by 14.1 per cent.

The difference in the annual growth rates for the MLS® HPI and average price was largely due to a greater share of high-end detached homes sold in the regions surrounding the City of Toronto this year compared to last.

The MLS® HPI removes the impact of shifts in the share of different property types sold from one year to the next.

“Market conditions in January were tighter compared to a year earlier, with an annual increase in sales up against a decline in listings. This is why growth in the MLS® HPI benchmarks continued to be strong, especially for singles, semis and townhouses, where there has been a persistent lack of inventory,” said Jason Mercer, TREB’s Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

Do You Think I Could Fit A Turkey In There?

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Back in 2012, I wrote about the frustrating fact that builders were making kitchens smaller and less functional than they'd been in the past (read that blog post here). I noted the lack of counter & cupboard space, and I illustrated the difficulty of trying to place a dining room table in a layout where there simply wasn’t enough room for one.

Here we are, four years later, and the trend is still going strong! Prep space and storage are still tight, and European-sized appliances have become the norm.

This becomes quite an issue when I’m working with a buyer who tells me they want to be in a new condo and have a “chef’s kitchen” with all the bells-and-whistles.

Unfortunately, these two features rarely go hand-in-hand. Not unless you’re spending the big bucks!

Great kitchens are oftenonly found in larger condos now (mirroring the trend towards only making parking available to purchasers of larger units).

What about those buyers who are in the market for something smaller though? A one-bedroom + den in the 650 - 700 sq ft range, for example?

It just so happens I’m working with a buyer right now who’s shopping in that range. She has a healthy budget, she wants to be in a newer building, and she wants a kitchen that’ll allow her to her enjoy her love of cooking.

Sounds totally reasonable, right?

Unfortunately not. The kitchens we’re seeing are falling short of what she wants.

I still remember the look of disappointment on her face when she saw her first Miele 24” oven.

”Do you think I could fit a turkey in there?”

That’s one of the questions I hear most often when a buyer sees one of these tiny appliances for the first time.

“I want to be able to have family or friends over for dinner, and cook a decent meal.”

While you can actually roast a (small) turkey in a 24” oven, there isn’t room for much else! And forget about heating multiple dishes at once (which can make cooking for a bunch of dinner guests rather difficult).

Granted, this isn’t an issue for every buyer. I know plenty of people who don’t cook much, and could care less about counter space or the size of their appliances.

For the ones that do care though, it’s frustrating.

The fact is, in today’s Toronto condo market, buyers have to make some concessions if they want to be in a new building. And the size of the kitchen is often one of those concessions.

Like I said in that 2012 blog post mentioned above, condo kitchens ain’t what they used to be.

If you're thinking of making a move and would like to know how I can help, feel free to contact me for more info.

November 2015 Market Stats: Infographic & Report

Following is TREB's market report for November 2015:

Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 7,385 home sales through TREB’s MLS® System in November 2015 – up by 14 per cent compared to November 2014.

This result also represented the best result on record for the month of November.

Sales through the first eleven months of 2015 amounted to 96,401.

“Not only did we see a record sales result for November, but with one month left to go in 2015, we have already set a new calendar year record for home sales in the TREB market area, eclipsing the previous record set in 2007. Sales were up on a year-over-year basis for all major home types, both in the City of Toronto and surrounding regions. This suggests that the demand for ownership housing is widespread, from first-time buyers to long-time homeowners across the GTA,” said Mr. McLean.

The MLS® Home Price Index (HPI) Composite Benchmark was up by 10.3 per cent year over year in November.

The average selling price for all transactions was also up by a similar annual rate of 9.6 per cent to $632,685.

Annual rates of average price growth for November and the first eleven months of 2015 were similar, with the strongest rates of increase being reported for low-rise home types, including detached and semi-detached houses and townhouses.

“Demand for ownership housing has remained strong in the GTA throughout 2015, with sales generally increasing at a greater annual rate compared to new listings. This means that competition between buyers has strengthened in many neighbourhoods in the City of Toronto and surrounding regions. The end result has been upward pressure on home prices well above the rate of inflation in most cases,” said Jason Mercer, TREB’s Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

October 2015 Market Stats: Infographic & Report

Following is TREB's market report for October 2015:

Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 8,804 home sales through TREB’s MLS® System in October 2015.

This is the best result on record for the month of October.

“It is clear that many GTA households remain upbeat about home ownership because owning a home represents a high quality, long-term investment. We will see a big, new record this year for home sales reported through TREB’s MLS® System,” said Mr. McLean.

“Despite the record October result, I must point out that the Government of Ontario could hamper home sales in the near future. The Wynne government is seriously considering allowing municipalities throughout Ontario to institute a second land transfer tax on top of the existing provincial tax. Recent polling has shown that the great majority of Ontarians oppose this tax and would consider delaying a move if they were forced to bear the additional upfront cost,” added Mr. McLean.

The MLS® Home Price Index (HPI) Composite Benchmark was up by 10.3 per cent year over year in October.

Over the same period, the average selling price for all home types combined was up by 7.3 per cent to $630,876.

Price growth continued to be driven by the low-rise market segments.

“Record sales coupled with a constrained supply of listings in many GTA neighbourhoods has underpinned very strong price growth throughout 2015. Even if we do see a greater supply of low-rise listings in the marketplace over the next year, market conditions will remain tight enough to see continued price growth well-above the rate of inflation,” said Jason Mercer, TREB’s Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

When Should A Seller Consider Accepting A Bully Offer?

When should a seller consider accepting a bully offer?

I am of the opinion that a seller is almost always going to do better if they avoid looking at bully offers, and wait until their scheduled offer night instead.

Every now and then though, a seller finds themselves in a situation where a bully offer is just too damn good to pass up!

Sometimes the price is so phenomenally above what they were expecting to get, that it's just not worth the risk of waiting and ending up with a lower price on offer night.

Sometimes the sellers are seriously stressed out by the entire process of having their home on the market, and the prospect of having it all over-and-done with is a no brainer.

And then there are times where it's actually looking like the home is not going to get the offers that the sellers want/expect on offer night. Case in point...

Earlier this year I had a listing in the west end of the city.

We spent a couple of weeks prepping the property to go on the market, and we decided that the best strategy would be to review offers on a specific date (the following Tuesday after the property initially hit the market).

I actually felt that we were pricing the home at the very top range of what it might be worth, and that we shouldn't necessarily expect to get multiple offers on offer-night. My clients appreciated where I was coming from, but we still felt that a hold-back on offers was the right strategy since comparable homes rarely come up for sale in the area.

Five days into the listing, I received a call from a buyer's agent, saying that her clients wanted to submit a bully offer. My clients were happy to look at it.

Once the offer was registered with my office, I did my duty and reached out to every single agent who had shown the property. And you know what? None of them had clients who were interested in submitting an offer. Not one.

None of them wanted to compete with a bully offer, and in fact, none of them were planning to submit anything on the scheduled offer night either!

It was quickly becoming apparent that this bully offer was probably the only offer we were going to see.

I told my sellers that they were likely going to do much better if we worked with the bully offer that night, as the buyers would be acting under the perceived threat of having to compete with other buyers on offer-night.

We ended up selling the property that night, with only the one offer, for above the list price.

Needless to say, my clients were very happy. The buyers were happy too, as they the secured the home they wanted (who knows if another buyer might've come out of the woodwork on the scheduled offer night and out-bid them?).

Bully offers are a tricky beast, and it's sometimes a tough call on whether or not to to work with them. Sometimes though, it just makes sense to take the money and run!

If you're thinking of selling your home, and you want an agent who knows when you should or shouldn't consider accepting a bully offer, feel free to contact us for more info.

September 2015 Market Stats: Infographic & Report

Following is TREB's market report for September 2015:

Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported a record number of transactions for the month of September through TREB’s MLS® System.

There was a combined 8,200 home sales reported for September 2015.

This result was up 2.5 per cent compared to September 2014.

TREB MLS® sales through the first nine months of 2015 amounted to 80,331, which also represented a record result and a 9.5 per cent increase compared to the first three quarters of 2014.

“We are on track for record home sales reported through TREB’s MLS® System this year. Barring a drastic shift in the economy over the next three months, total transactions reported by TREB Members in 2015 are expected to be at or near the 100,000 mark. This is a testament to the importance that GTA households put on home ownership as a long- term investment,” said Mr. McLean.

The MLS® Home Price Index (HPI) Composite Benchmark Price was up by 10.5 per cent year over year.

The average selling price for all home types combined was also up by 9.2 per cent annually to $627,395.

Growth in the MLS® HPI Composite Benchmark and the average price was driven by the low-rise market segments, including detached and semi- detached houses and townhouses.

“While September was the second straight month where annual growth in new listings outstripped annual growth sales, total active listings at the end of the month still remained below last year’s level. This, coupled with the record pace of sales experienced so far this year, suggests that competition between buyers will remain strong as we move into the fourth quarter. Expect strong rates of price growth to continue through the remainder of 2015 and into 2016,” said Jason Mercer, TREB’s Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

August 2015 Market Stats: Infographic & Report

 

Following is TREB's market report for August 2015:

Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 7,998 residential transactions through the TREB MLS® System in August 2015.

This result represented a 5.7 per cent increase compared to 7,568 sales reported in August 2014.

On a GTA-wide basis, sales were up for all major home types.

The annual growth rate in new listings was greater than the annual growth rate in sales, but active listings at the end of August were still down compared to last year.

This suggests that sellers’ market conditions remained in place, especially where low-rise home types like singles, semis and townhouses were concerned.

“Buyers in the GTA remain confident in their ability to purchase and pay for a home over the long term. They see ownership housing as a quality investment that has historically produced positive returns while at the same time providing owners with a place to live in their chosen community,” said Mr. McLean.

Both the MLS® Home Price Index (HPI) Composite Benchmark and the average selling price for all home types combined were up substantially in August compared to the same period in 2014, with both increasing by approximately 10 per cent year-over-year.

“A record year for home sales continued to unfold in August as competition between buyers exerted upward pressure on selling prices. It was encouraging to see annual growth in new listings outstrip annual growth in sales, but we will need to see this for a number of months before market conditions become more balanced," said Jason Mercer, TREB's Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

Your Realtor Is Full Of S**t!

With Labour Day behind us now, the fall real estate market has officially begun!

Just like last year, and the years before that, we're going to see a ton of new listings hit the market this week. And inevitably, some of those listings are going to be overpriced.

There are a handful of reasons why a seller chooses to overprice their home. In this post I want to focus on just one of those reasons: The listing agent lied to the sellers about the true market value of the property.

The Sunshine Approach

The manager at the brokerage where I started my real estate career referred to this as "The Sunshine Approach"; the idea being that the listing agent is "blowing sunshine" up the seller's arse by deliberately overvaluing the home in order to get the listing.

I see it happen all the time. A seller interviews two or three realtors, and ultimately chooses the one who suggests the highest list price. The seller gets stars in their eyes, and is fooled into thinking that the ridiculous list price is actually achievable.

The listing agent's plan is simple: continually work on the seller for price reductions until the home finally sells (almost always for less than market value).

Isn't The Seller Partially To Blame?

Yes, the seller is often partially to blame here. Especially when the other two realtors they interviewed suggested lower list prices (which were no doubt backed-up by tangible market data and past sale prices in the neighbourhood).

Instead, the seller chose to list with the one who came up with the highest number, in spite of what the market data showed.

The seller in this situation sometimes knows, in their gut, that it's too good to be true.  But flattery and the promise of an unprecedented sale price get the better of them.

Have I ever taken an overpriced listing?

Yes, of course I have taken an overpriced listing.

The difference being, the sellers knew from the beginning where I stood on the value of the home.

I made it clear to them that the list price they were choosing was too high, that there were risks involved with overpricing, and that a price reduction would eventually be needed.

It's certainly not the best way to sell a home, but sometimes a seller is determined to "try their price first", even if doing so is going to potentially have a negative impact on the final outcome.

In the end, a seller needs to be realistic and question any advice that sounds too optimistic.

If you're interviewing more than one realtor, be cautious if one of them values your home significantly higher than the others.

A little sunshine is good for your health, but too much will leave you burned.

If you're thinking of making a move and would like an honest valuation of your home, feel free to contact us for more info.

July 2015 Market Stats: Infographic & Report

Following is TREB's market report for July 2015:

Toronto Real Estate Board President Mark McLean announced record home sales for the month of July. Greater Toronto Area REALTORS® reported 9,880 sales through TREB's MLS® System, representing an eight per cent increase compared to July 2014.

The number of transactions were up for all major home types, including a double- digit year-over-year increase in condominium apartment sales.

"As we move towards a new record for home sales this year, it is important to point out that home ownership demand has been driven not only by low borrowing costs, but also by the fact that the GTA economy has been performing quite well, with the unemployment rate lower compared to last year. Home buyers remain confident in the long-term benefits of owning a home," said Mr. McLean.

The MLS® Home Price Index (HPI) Composite Benchmark, which accounts for benchmark home prices in communities throughout the TREB market area, was up by 9.4 per cent year- over-year in July 2015.

Over the same period, the average selling price was up by a slightly greater amount, growing by 10.6 per cent annually to $609,236.

Detached homes continued to lead the way in terms of price increases, with annual growth in the average selling price outstripping growth in the MLS® HPI detached benchmark.

This suggests that there continued to be a greater share of high-end homes sold this year compared to last.

"With the level of inventory in the GTA trending below two months, many listings continued to generate a lot of interest from buyers. Not surprisingly, this supported further price increases well-above the rate of inflation. Assuming similar interest rate and economic environments over the next five months, strong price growth will remain the norm for the rest of 2015," said Jason Mercer, TREB's Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

April 2015 Market Stats: Infographic & Report

 

Following is TREB's market report for April 2015:

Toronto Real Estate Board President Paul Etherington announced that Greater Toronto Area REALTORS® reported 11,303 sales in April 2015.

This was the highest sales result on record for the month of April and represented a 17 per cent increase in comparison to April 2014.

While sales increased strongly on a year-over-year basis, new listings were up over the same period by a more moderate five per cent.

“The record April result clearly points to the fact that a growing number of GTA households view ownership housing as a high quality long-term investment. This is evidenced by the strong sales growth we have experienced in Toronto and surrounding regions for all major home types. First-time buyers and existing homeowners remain very active in today’s market,” said Mr. Etherington

The overall average selling price, which accounts for all homes reported sold by GTA REALTORS® in April 2015, was up by 10 per cent year-over-year to $635,932.

The MLS® Home Price Index (HPI) composite benchmark, which estimates the price of a benchmark home with the same attributes from one period to the next, was up by 8.4 per cent over the same period.

The fact that average price growth outpaced growth for the MLS® HPI Composite Benchmark, suggests that a greater share of higher-end homes changed hands this year compared to last.

Irrespective of the indicator used, price growth in the GTA was strongest for low-rise home types.

However, the better supplied condominium apartment segment also remained healthy with price growth above the rate of inflation.

“Demand for ownership housing was very high relative to the number of homes available for sale in April. This situation is not expected to change markedly as we move through the remainder of 2015. Until we experience a sustained period in which listings grow at a faster pace than sales, annual rates of home price growth will remain strong,” said Jason Mercer, TREB’s Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

March 2015 Market Stats: Infographic & Report

 

Following is TREB's market report for March 2015:

Toronto Real Estate Board President Paul Etherington announced that Greater Toronto Area REALTORS® reported 8,940 sales in March 2015.

This result represented an 11 per cent increase compared to March 2014.

Sales were up for most major home types, both in the City of Toronto and the surrounding regions.

New listings were also up, but by a lesser 5.5 per cent, indicating tighter market conditions.

“Home sales increased compared to last year as the cost of home ownership remained affordable, with lower interest rates going a long way to mitigate the effect of rising home prices. However, a substantial amount of pent-up demand remains in place, especially as it relates to low-rise market segments. This suggests that strong competition between buyers, which has fuelled strong price growth so far this year, will continue to be experienced throughout the spring,” said Mr. Etherington.

In March, the average selling price for all reported transactions was $613,933 – up 10 per cent year-over-year.

The MLS® HPI Composite Index, which tracks benchmark homes with the same attributes from one period to the next, was up by 7.9 per cent.

Average price growth was strongest for detached homes in the City of Toronto, at 15.9 per cent.

Over the same period the detached MLS® HPI in the '416' area code increased 7.8 per cent.

The MLS® HPI provides a clear indication of price growth due to market forces - the relationship between demand and supply. Comparing MLS® HPI growth to average price growth provides a sense of the changing mix of home types sold from one period to the next.

"It is clear that seller's market conditions in many parts of the GTA are driving price growth. However, looking at the detached market segment in the City of Toronto in particular, growth in the average selling price outstripped growth in the MLS® HPI. This points to the fact that the mix of detached homes sold this year compared to last has shifted towards more expensive properties," said Jason Mercer, TREB's Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

February 2015 Market Stats: Infographic & Report

 

Following is TREB’s market report for February 2015:

Toronto Real Estate Board President Paul Etherington announced that Greater Toronto Area REALTORS® reported 6,338 home sales through the TorontoMLS system in February 2015.

This result represented a substantial 11.3 per cent year-over-year increase compared to February 2014.

Large annual increases in transactions were noted for most major home types, in the City of Toronto and surrounding GTA regions.

“Even with the record low temperatures last month, we still saw an increase in the number of people purchasing homes in the GTA. This speaks to the importance households place on home ownership and the fact that buyers continue to view ownership housing as a quality long-term investment in which they can live,” said Mr. Etherington.

The overall supply of homes for sale, as measured by the count of active listings at the end of February 2015, was down by 8.7 per cent compared to the same count in February 2014.

This means that market conditions became tighter, leading to more competition between buyers.

The overall average selling price for February 2015 home sales was $596,163– up by 7.8 per cent compared to the average for February 2014.

Driving this increase was the detached market segment.

In the City of Toronto, the average detached selling price moved above $1 million dollars for the first time in a calendar month.

“The strong year-over-year price growth we experienced in February points to the robust demand for ownership housing in the GTA, coupled with a constrained supply of homes for sale in some market segments, especially where low-rise home types like singles, semis and townhouses are concerned,” said Jason Mercer, TREB’s Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.

Say Goodbye To Your Condo!

The Toronto Star recently broke the news that Urbancorp has cancelled its Kingsclub Condominium complex on King Street West (read the article here).

In place of the condos, three towers of rental apartments are to be built instead.

What does this mean for anyone who bought a pre-construction unit in this development? Basically, they're screwed.

Yes, they'll get their deposits back. But all they'll have to show in return is a measly bit of interest .

Needless to say, these buyers are nonplussed.

When I first heard the news, I immediately thought of the South Park episode referenced in the photo at the top of this blog post. (If you haven't seen it, here's a short clip that sums up the episode nicely).

Aaaand... it's gone!

Over the past couple of weeks, I’ve had a bunch of clients ask whether or not anyone could have seen this coming.

I tell them all the same story:

I began my real estate career back in 2006, at a small boutique brokerage in the St Lawrence Market area.

My broker of record there had decades of experience in the real estate game, and had spent a handful of those years selling pre-construction condos.

He told us stories of how so many young buyers lost their deposits when the market crashed in the early 1990’s, because the units they had committed to buying were now worth 20% - 30% less than what they had agreed to pay and they could no longer get the financing they were counting on to close.

He also told us about the possibility (however rare it may be) that a condo development could indeed be cancelled if the right (or rather, wrong) set of circumstances were to occur.

These stories stuck with me, and whenever I have a client express interest in purchasing a pre-construction condo I provide them with a detailed list of "what could go wrong." And what happened at Kingsclub Condos is on that list.

Make no mistake, Urbancorp is within their legal right to do what they've done here. It still stinks though.

I keep going back to the question, "What else could these buyers have done with the deposit money that sat stagnant in a trust account for years?"

I'm sure some of them could've used that money to purchase a resale condo instead, rent it out, create some positive cashflow, and start building equity.

That opportunity is lost now though, and these buyers are back to square one.

If there's a positive to come out of this story, it's that we all now have a memorable, real-world example to point to when considering the risks involved in buying pre-construction.

Sure, what happened at Kingsclub Condos is a rare occurrence in the Toronto market, but I don't think any of us will soon forget it.

It'll stick around as a cautionary tale, the one about the time the developer told their buyers, "Kiss your condo goodbye!"

If you’re thinking of making a move and would like to know how we can help, please contact us for more info.

January 2015 Market Stats: Infographic & Report

 

Following is TREB’s market report for January 2015:

Toronto Real Estate Board President Paul Etherington announced a strong start to 2015, with robust year-over-year sales and average price growth in January.

Greater Toronto Area REALTORS® reported 4,355 home sales through the TorontoMLS system during the first month of the year.

This result represented a 6.1 per cent increase over January 2014.

During the same period, new listings were up by 9.5 per cent.

"The January results represented good news on multiple fronts.

First, strong sales growth suggests home buyers continue to see housing as a quality long-term investment, despite the recent period of economic uncertainty.

Second, the fact that new listings grew at a faster pace than sales suggests that it has become easier for some people to find a home that meets their needs," said Mr. Etherington.

The average selling price for January 2015 home sales was up by 4.9 per cent year-over- year to $552,575.

The MLS® Home Price Index (HPI) Composite benchmark was up by 7.5 percent compared to January 2014.

"Home price growth is forecast to continue in 2015.

Lower borrowing costs will largely mitigate price growth this year, which means affordability will remain in check.

The strongest rates of price growth will be experienced for low-rise home types, including singles, semis and town houses.

However, robust end-user demand for condo apartments will result in above-inflation price growth in the high-rise segment as well," said Jason Mercer, TREB's Director of Market Analysis.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

For complete copies of TREB’s Monthly Market Watch Reports, visit my archives here.