You Can't Always Tell From The Photos

It goes without saying that high-quality professional photos are an EXTREMELY important part of any realtor’s marketing plan when it comes to selling a property. At least they should be...

I see listings all the time that have cheap, unprofessional photos. Or worse - no photos at all!

Quality aside, what about photos that don’t accurately represent the property?

I recently showed two houses to some clients of mine; one that failed (miserably) to live up to the glory the photos had promised and one that actually turned out to be a real gem, despite what the photos suggested.

With the first house, the photos and virtual tour made the place look immaculate. We stepped inside expecting to see a solid reno in move-in condition. Instead, we found quite a bit of wear-and-tear on the hardwood floors, a half-finished basement, and some major sloping on the second floor.

With the second house, the online marketing made the place look a lot darker and more dated than it really was. We weren’t expecting much and were quite surprised to see just how much natural light there was when we stepped inside.

In both cases, the photos fell short of showing us what the properties truly had to offer.

I’m sure that the photos for the first house brought in plenty of potential buyers. However most of those buyers were no doubt disappointed with what they saw once inside and moved on to the next property on their list.

And I’ll bet the photos for the second house actually scared off a number of potential buyers. Some of those buyers might have considered making an offer if they’d come to see the place in person.

Keep in mind that when you’re searching for properties online, you can’t always tell what's what from the photos. Nothing beats visiting a property in person and seeing for real if the place is as good... or as bad... as the photos say it is.

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.

Toronto Real Estate Market Report: August 2012 Statistics

Following is TREB’s market report for August 2012:  Greater Toronto Area (GTA) REALTORS® reported 6,418 sales through the TorontoMLS system in August 2012, representing a year-over-decline of almost 12.5 per cent compared to 7,330 sales reported in August 2011. The number of new listings reported in August was down by 5.5 per cent compared to the same period in 2011.

“Residential transactions were down in August compared to last year. Stricter mortgage lending guidelines, which came into effect in July, arguably played a role. In the City of Toronto, the additional impact of relatively higher home prices coupled with the upfront cost associated with the City’s Land Transfer Tax led to a stronger annual decline in sales compared to the rest of the GTA,” said Toronto Real Estate Board (TREB) President Ann Hannah.

The average selling price for August 2012 transactions was $479,095 – up by almost 6.5 per cent compared to August 2011. The annual rate of price growth was driven by the low-rise home segment in the City of Toronto, including single-detached homes with an average annual price increase of 15 per cent. The MLS® Home Price Index (MLS® HPI)* composite index, which allows for an apples-to-apples comparison of benchmark home prices from one year to the next, was up by 6.3 per cent year-over-year.

“While sales were down year-over-year in the GTA, so too were new listings. As a result, market conditions remained quite tight with substantial competition between buyers in the low-rise market segment,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“The trends for sales and new listings are moving somewhat in synch, suggesting that the relationship between sales and listings will continue to promote price growth moving forward.”

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.

Why Wait Until After Labour Day To List Your Home For Sale?

Why Wait Until After Labour Day To List Your Home For Sale? Photo

Around this time last year I wrote a blog post about why it might be better to wait until after Labour Day to list your home for sale (read it here).

There's always the other side of the coin though, and in that article I noted that there are potential benefits to listing before Labour Day as well. For example, a seller could do well if everyone else was waiting until September and their property was the only one on the market.

A great example of this happened in my office just a few days ago.

A colleague of mine listed a one-bedroom condo for sale on King West. They priced the property at what appeared to be market value and decided to hold-back offers for a few days. Come offer night, there were a total of three buyers at the table!

Three competing offers on your property is better than ideal.  In fact it's more than most sellers can hope for, especially at a time of year when many buyers are deciding to put their search on hold.

There are always a handful of factors that go into any successful sale; pricing, staging, marketing, negotiations, etc. These factors aside, I think that part of the reason the sellers of this condo did so well is that they listed at a time when most other sellers are standing on the sidelines waiting for summer to end.

There's always a bit of risk in deciding to put your property on the market in mid-late August. As the above illustrates though, it's a risk that can sometimes be well rewarded.

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.

Are There Deals To Be Had In The Last Few Weeks Of Summer?

The last few weeks in August are similar to the last few weeks in December in that these are the two times of year when a relatively large portion of the real estate market (buyers, sellers, and realtors) are away on vacation.

Not everyone is out of the game though. We still see listings come on the market right up until Labor Day weekend and Christmas. If you're a buyer who's still actively looking you may be able to take advantage of the timing here.

I say "may" because it's actually quite rare to come across a bonafide "steal" in the Toronto real estate market. There are so many eyes on the listings at all times and nothing is ever going to slip past everyone.

Having said that, I've certainly had buyer clients do quite well by purchasing at the end of summer. They've benefited from the fact that there simply aren't as many other buyers out there actively looking. Less competition.

A property that might otherwise attract multiple offers may only get one. And there might actually be room for a bit of negotiation on the list price (imagine that!).

A handful of the buyers I'm working with at the moment have asked if they should put off the search for now and wait until after Labor Day weekend. My advice is almost always the same in this situation - "There'll be more listings to choose from if you wait until September. But there'll be more buyers to compete with then as well. If something really great pops up in the meantime, don't hesitate to make a move... You may be glad you did."

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.

Toronto Real Estate Market Report: July 2012 Statistics

Following is TREB’s market report for July 2012:   TORONTO, August 3, 2012 – Greater Toronto REALTORS® reported 7,570 sales in July 2012, representing a decline of 1.5 per cent compared to 7,683 sales reported in July 2011. The decline was most pronounced in the condominium apartment segment in the City of Toronto. Total sales in the rest of the Greater Toronto Area (GTA) were up compared to the same period last year.

“Very strong annual sales growth in the first half of 2012 and an earlier peak in sales this spring compared to 2011 help explain more moderate sales this summer. New mortgage lending guidelines and the additional upfront cost of the City of Toronto land transfer tax also prompted some households to put their buying decision on hold,” said Toronto Real Estate Board (TREB) President Ann Hannah.

The average selling price in July 2012 was $476,947 – up by four per cent compared to July 2011. The MLS® Home Price Index (MLS® HPI)* composite index, which allows for an apples-to-apples comparison of benchmark home prices from one year to the next, was up by 7.1 per cent year-over-year.

“The GTA housing market became better-supplied in recent months. Buyers benefitted from more choice in the market place, resulting in less upward pressure on the average home price in July,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“The mix of homes sold in July 2012 versus July 2011 also appears to have changed, further influencing the average selling price. This is evidenced by the different annual rates of growth between the overall average price and the MLS HPI®,” continued Mercer.

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.

Ouch! Feeling The Sting Of Flaherty's New Mortgage Rules

There’s been a lot of talk over the last few weeks about how many buyers out there are actually going to feel the sting of the new mortgage rules that came into effect on July 9^th.  While the media has been playing up the severity of the implications these new rules bring, most industry insiders feel that only a relative minority of purchasers will actually have their buying power significantly reduced.

I thought it might be a good idea to shed some light from a realtor’s perspective and take a look at a couple of real world examples.

Example #1

A client of mine was previously looking to purchase a one-bedroom condo in the King West area for somewhere in the $325,000 - $330,000 range.  With the new rules in place, he’s been bumped down to well under $300K.  This means he’s likely going to have to say goodbye to a separate bedroom and settle for a bachelor suite.  Now he’s wondering if renting might be a better option...

Example #2

Some clients of mine were previously looking to purchase a 3-bedroom, 2 bathroom home in the east-end for around $600,000.  With the new rules in place, they’ll likely have to take on a basement tenant if they want to continue shopping for a house in the same price range.  This means that they may have to settle for only one bathroom, since 2^nd bathrooms in these homes are almost always located in the basement.

So, there you go - two real world illustrations of how Flaherty's tightening measures are affecting purchasers in the Toronto real estate market.

I will note that, aside from these two buyers, none of my other clients have been noticeably affected by the new mortgage rules.  They're either purchasing with at least 20% down or they're planning on spending conservatively less than the amount they've been approved for.

What about you? Have you had to reassess your home buying plans as a result of the new mortgage rules?

For access to a Mortgage Calculator and other financial tools, visit my website here. 

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.

Toronto Real Estate Market Report: June 2012 Statistics

Following is TREB’s market report for June 2012:  Greater Toronto REALTORS® reported 9,422 home sales through the TorontoMLS system in June 2012. The number of transactions was down by 5.4 per cent in comparison to June 2011. The year-over-year decline was largest in the City of Toronto, where sales were down by 13 per cent compared to June 2011. Sales in the rest of the Toronto Real Estate Board (TREB) market area were comparable to a year ago.

“Buyers continue to face the substantial upfront cost associated with the City of Toronto’s unfair Land Transfer Tax,” said TREB President Ann Hannah. “Recent polling by TREB suggests that many households are considering home purchases outside of the City of Toronto to avoid paying the Land Transfer Tax. This goes a long way in explaining the disproportionate decline in sales in the City versus surrounding regions.”

The average selling price in June was $508,622 – up by 7.3 per cent compared to June 2011. The mortgage payment associated with the average priced home in June, assuming five per cent down and a five-year fixed rate mortgage amortized over 25 years, would account for approximately 35 per cent of the average household’s income in the GTA after adding property tax and utility payments.

“According to new mortgage lending guidelines set out by Finance Minister Jim Flaherty, the GTA housing market remains affordable. The share of the average household’s income going toward major home ownership payments for the average priced home remains below the 39 per cent ceiling recently announced by Mr. Flaherty,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“The average household in the GTA continues to benefit from a considerable amount of flexibility to account for higher interest rates moving forward,” continued Mercer.

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.

Toronto Real Estate Market Report: May 2012 Statistics

Following is TREB’s market report for May 2012:  Greater Toronto REALTORS® reported 10,850 transactions through the TorontoMLS system in May 2012 – an 11 per cent increase over the 9,766 sales in May 2011. Sales growth was strongest in the ‘905’ regions surrounding the City of Toronto.

“Sales growth in the ‘905’ area code was stronger than growth in the City of Toronto across all major home types. While lower average prices are certainly one factor that has contributed to this trend, recent polling also suggests that the City of Toronto’s land transfer tax has also prompted many households to look outside of the City for their ownership housing needs,” said Toronto Real Estate Board (TREB) President Richard Silver.

New listings were up substantially on a year-over-year basis in May – rising by more than 20 per cent to 19,177.

The average price for May 2012 sales was $516,787, representing an annual increase of 6.5 per cent compared to $485,362 in May 2011. Price growth continued to be driven by the low-rise market segment.

“Strong competition between buyers seeking to purchase low-rise home types drove strong price growth in May. However, if new listings continue to grow at the pace they did in May for the remainder of 2012, the annual rate of price growth should begin to moderate on a sustained basis,” said Jason Mercer, TREB’s Senior Manager 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.

Viewing Properties: How Many Is Too Many?

My wife and I have been known to watch a fair bit of television together. Although we share a love of many of the same shows (Twin Peaks, The Mighty Boosh, ...to name a few) our viewing habits are different. She’s happy to sit through marathon sessions of back-to-back-to-back episodes, whereas I like to spread mine out.

When it comes to a show like Mad Men for example, I want time to digest what I’ve seen and let it sink in before moving on. In my opinion, cramming a bunch of episodes in all at once just muddies the experience.

I think the same can be said for viewing properties.

When I'm out with buyer clients I generally like to schedule no more than 4 or 5 homes for us to see. Anything more than that and it can become a bit of a blur.

The most homes I've ever shown a client on one outing is 10. By the end of the tour their heads were spinning and they couldn't remember which house was which. Yes, we took notes and had the listings to refer back to.  But it's still difficult to keep them separate in your mind. You inevitably remember one house as having the kitchen that was actually part of another house, etc. The details just blend together.

Houses usually aren't as bad as condos though.

With each house you're driving to a different area. Each has their own yard, their own their exterior, their own unique layout and feel, etc.

Condos on the other hand can be more difficult to differentiate. And it doesn't help that you can often view more condos than houses in the same amount of time. Especially when they're all located within just a few surrounding buildings.

I know that it's tempting to stuff the itinerary with as many viewings as possible. Especially when our lives are so busy already and we're looking for ways to maximize the free time we do have. Shopping for a home is a big deal though.

I would suggest that quality, not quantity, is what you want when touring homes of interest. Work with your realtor to select a handful of real contenders to view and you'll be better off for it.

Happy hunting!

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.

Toronto Real Estate Market Report: April 2012 Statistics

Following is TREB’s market report for April 2012:  Greater Toronto REALTORS® reported 10,350 transactions through the TorontoMLS system in April 2012. This level of sales was 18 per cent higher than the 8,778 firm deals reported in April 2011. The strongest sales growth was reported in the single-detached market segment, with transactions of this home type up by 22 per cent compared to a year ago.

“Interest in single-detached homes has been very high, both in the City of Toronto and surrounding regions. Growth in single-detached listings has not kept up with demand, which means competition between buyers in this market segment increased. With this in mind, it was no surprise that the strongest annual price increase was also experienced in the single-detached segment,” said Toronto Real Estate Board President, Richard Silver.

The average price for April 2012 transactions was $517,556 – up 8.5 per cent compared to April 2011. While price growth was strongest for single-detached homes, the better-supplied condominium apartment segment experienced a more moderate annual rate of price growth, at four per cent.

“Monthly mortgage payments remain affordable for home buyers in the Greater Toronto Area. While interest rates are generally expected to increase over the next two years, the extent and timing of rate hikes has been thrown into question by slower than expected economic growth in the first quarter of this year. On net, borrowing costs are expected to remain a positive factor influencing home sales through 2012,” said Jason Mercer, TREB’s Senior Manager 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.

Buyers: Should You Have A Pre-Offer Home Inspection Done?

A couple of months ago I wrote a blog post asking the question, "Sellers: Should you have a pre-listing home inspection done?" (read it here).

Despite all the benefits, the reality is that some sellers opt not to have one done. Fair enough. It just means that the responsibility is in the buyer's hands.

Buyers essentially have two options. They can submit a conditional offer and then have a home inspection done after the offer is accepted. Or they can have a "pre-offer" home inspection done before submitting an offer.

In a market like Toronto's, where offer hold-back dates are common and multiple buyers are coming to the table, pre-offer home inspections make a lot of sense. They allow potential buyers to satisfy themselves ahead of time and to submit an offer without a home inspection condition. A firm offer carries a lot of weight and is much more attractive than a conditional one.

The one drawback here is that you're spending $400-$500 and a few hours of your time on a property that you may not even end up getting. True, but it's short-sighted to let that deter you. A few hundred bucks is a small price to pay in comparison to the hundreds-of-thousands you're spending on the home itself. And the peace of mind you'll get from having the inspection done is priceless.

Although there are plenty of home inspection companies in the city of Toronto, Carson Dunlop & Associates Ltd. seems to be the go-to choice for many. They do a pretty good job of explaining the pre-offer home inspection themselves…

Following is an excerpt from the “Pre-Offer Home Inspection” page on Carson Dunlop & Associates’ website:

A Carson Dunlop Pre-Offer Home Inspection provides buyers with a competitive advantage when bidding on a home. By having a comprehensive inspection completed before offers are presented, our clients have an opportunity to make their offers more attractive with fewer conditions. The Pre-Offer Inspection provides our clients with unparalleled insight on the workings of the home to help them make an informed offer.

Our Services Include:

• A summary page detailing the key findings
• Improvement recommendations for conditions, with time frames and ball park costs
• Photos and colour illustrations for clarity
• A copy of our Home Reference Book ($69 value) to help understand how houses work, what wears out and important maintenance suggestions.

Added Value

Carson Dunlop Pre-Offer Home Inspection clients who are not successful with their home buying bid receive a $50 credit towards their next inspection. Another Carson Dunlop advantage!

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.

When Does The Spring Real Estate Market Actually Begin? (Re-visited)

Two years ago I wrote a blog post asking the question, "When does the spring real estate market actually begin?"

Among other things, I took a look at the downtown market stats (districts C01 & C08) and found that there was an almost 80% increase in new listings in the week after Easter, compared to the week before.

Although we only have three full days of stats for the same week in 2012, I thought it would be interesting to see how they stack up against those from 2010.

Interestingly, the contrast we saw in 2010 isn't there now and this week's numbers aren't looking much different from last week's...

Here's the article as posted in April 2010, with the updated 2012 stats (you can read the original article with 2010 stats here):

When Does The Spring Real Estate Market Actually Begin?

The answer to the above question depends largely on who you're asking.  Speaking as a Realtor I'd say that the spring market actually starts as early as January.  Granted, the number of listings and sales this early in the year aren't going to match the level of activity we see in March, April, May,...  None-the-less there's activity in January and it's certainly the start of a market that will grow over the coming months.

Many feel that the spring market doesn't really begin until the month of March.  There's some truth to this in the sense that March is generally when we start to see signs of warmer weather and buyers are more apt to tour the neighbourhood for open houses.

March is a little tricky though, as a number of buyers, sellers and realtors aren't fully participating due to commitments associated with "March Break".  At least those with families anyway.

I would suggest that the safest bet is to consider the week after Easter Weekend as the full fledged beginning of the spring real estate market.  A number of sellers wait specifically until after Easter to put their property on the market.  And a number of buyers wait until then to kick their search into high gear.

However, this year may be a bit of an exception. Monday through Wednesday of last week we saw 176 new listings (condos, lofts, and houses) hit the market in TREB districts C01 and C08 (east of Dufferin / south of Bloor / west of the DVP).  Monday through Wednesday of this week we saw 172 new listings. Not much difference at all.  A decrease actually.

What does this mean? I'd suggest that it means a number of buyers chose not to wait until after Easter this year to list. And indeed, if you look at the numbers you'll find that there were more new listings this year in the week before Easter (238) compared to the same week in 2010 (190).

Regardless of when the spring market actually starts, we're at mid-April now and things are movin' & shakin'.  And they'll remain so for the coming months.  Then what?  The summer market of course!  When does that start?  Well......

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.

Toronto Real Estate Market Report: March 2012 Statistics

Following is TREB’s market report for March 2012:  Greater Toronto REALTORS® reported 9,690 sales through the TorontoMLS System in March 2012. This result was up by almost eight per cent in comparison to the 8,986 deals reported during the same period in 2011.

“The GTA resale market has not suffered from a lack of willing buyers this year. Buyers have been spurred on by the positive affordability picture brought about by low mortgage rates,” said Toronto Real Estate Board President Richard Silver. “The challenge has been a lack of inventory. Many listings have attracted multiple interested buyers. Strong competition has led to annual rates of price growth well above the long-term average.”

The average selling price in the GTA was $504,117 in March – up by 10.5 per cent in comparison to March 2011.

“The number of new listings was up last month in comparison to March 2011. However, based on the historic relationship between price and listings, the GTA resale market should be better supplied. If competition between buyers remains as strong as it is right now, we will almost certainly see an average selling price above $500,000 for 2012 as a whole,” said Jason Mercer, TREB’s Senior Manager 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.

How Am I Supposed To Show Your Listing If I Can't Find The Key?

I was viewing condos at Bathurst & Lakeshore earlier this week with a buyer client of mine. The plan was to see six properties in total, all located within two neighbouring buildings. We got in to see five of the properties, no problem. Unfortunately, condo number six - the one she really wanted to see - didn't go as smoothly...

First of all, the lock box wasn't where they said it would be. We had to explore all three stairwells before finally spotting it, all the way up on the landing to the next floor!

Then, the code they gave us wasn't working. I tried a few alternate number variations with no success and decided to phone the listing brokerage to confirm the code.

Indeed, the code they had on their end was the same one I first tried. They had no clue what could be wrong.

I had the listing agent paged and we waited patiently outside the suite. Ten minutes later my phone rang. The agent too had no clue what could be wrong and told me that he would have to try and get a hold of his partner, as they were the one who really knew more about this particular listing.

We waited another 10 minutes. No phone call. We left.

Ultimately, my client and I both went home empty handed that day. I wasn't able to show her the property that I felt might've been a real contender and she wasn't able to see the property she was most looking forward to.

Granted, mix ups do happen and keys sometimes go missing. Fair enough. This was a bit more than that though.

As frustrating as it is for me that we couldn't get in to see the property, it's the seller I really feel bad for. They have no idea that ready, willing, and qualified buyers are coming to view their condo - only to have the door slammed in their face when they arrive.

How many other agents unsuccessfully tried to show the property that day? How many of them do you think are actually going to rebook and come back again another day, especially with the looming possibility that the key still might not be there!

As a seller you've often only got one shot at getting your property seen by a potential buyer. If they can't get in to see your home then they'll just move on to the next.

There are plenty of important factors in ensuring your property gets ample exposure; staging, photography, list price, to name a few. But when you're realtor can't even handle the small task of making the key available for showings... all the marketing in the world isn't going to help a lick.

If you’re thinking of selling and would like to find out more about my marketing plan, feel free to contact me for more info.  

$421,800 Over The Asking Price. Seriously?

That's right. A bungalow in north Toronto sold earlier this month for $421,800 over the asking price. The home was listed at $759,000 and sold in multiple offers for a whopping $1,180,800.

According to an article from today's CBC News (reposted in full, below), there were a total of five bids above $1 million dollars. This tells us that the successful purchaser wasn't alone in their seven figure valuation of the property.

Needless to say, there's been plenty of attention from the media, realtors, and the home buying public over the last few weeks.

The price isn't the only reason this story is generating so much hoopla though. The location and style of the home are notable as well.

Remember, we're talking about a bungalow... in north Toronto...

Would the reaction have been as strong if this was a 3-storey detached in The Beach? Or a mansion in the Annex?

Or what about Queen West? A colleague of mine just listed a stunning million dollar property there. I popped into the agent's open house today and the place really is impressive - something right out of Architectural Digest. Now that is the kind of property (and location) that could sell for a significant price without all the accompanying hullabaloo.

Okay, we've looked at price, location, and style of home. From what other angle can we view this north-Toronto bungalow sale?  How about the type of buyer involved in the purchase? That's the focus of today's CBC News article. Check it out...

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Offshore Buyers Pricing Canadians out of Housing Market

Globe & Mail | By Prithi Yeljaj | March 15, 2012

Overseas investors are snapping up properties in Canada's largest cities, driving up prices and pushing ordinary Canadians out of the housing market, observers say.

Real estate experts call it the "new reality," and the high price paid for a north Toronto bungalow is the latest evidence.

This month, the three-bedroom bungalow, circa the 1960s and without much updating, sold for $421,800 over the asking price, creating a buzz among agents and other buyers.

Located in Willowdale, where similar detached houses typically sell for just short of $900,000, the bungalow at 300 Dudley Ave. was listed at $759,000.

The winning bid of $1,180,800 came from a university student whose parents live in China and own a business in San Francisco. There were four other bids of more than $1 million.

Michael Adelson represented the seller of the Willowdale bungalow.

"The initial response was quite vociferous," said Michael Adelson, a Re/Max agent who represented the seller and received several phone calls about the deal after it was done.

"There's a lot of anger among Canadians who earn money here that they've been priced out of the market. There is some degree of anxiety about how people are going to compete with these hyper-inflated prices."

'Outrageous and borderline bizarre'

Adelson declined to discuss the specifics of the Willowdale deal, citing client confidentiality.

But CBC business commentator Michael Hlinka called the deal "outrageous and borderline bizarre."

The strong reaction to the price likely stems from how it changes the vision of affordability for average Canadians, he said.

Property markets in other large cities, such as Vancouver and Calgary, are undergoing similar pricing shocks, he said.

“We’re looking at this through a prism of our expectations growing up in Canada in the 1950s, '60s and '70s, when part of the Canadian dream was that you would own your own single-family home," Hlinka said. "But as Canada matures, we’re going to be looking at a new reality, where that may be out of reach. And I don’t think you can turn back the clock.”

Brad Lamb says people who live in downtown Toronto will have to be rich or settle for condos. (Brad Lamb Real Estate)

Toronto real estate mogul Brad Lamb said Canadians' home-buying expectations have to change, but he doesn't believe that overseas investors are to blame.

The scarcity of the product — in this case, single detached homes — is key, he said. And as the Toronto population grows and land available for new houses becomes scarce, the competition for these homes will become even more intense.

Condos are the alternative. Already, they're the norm for families wanting to live in the central cores of cities such as New York and Chicago, he said.

"It's an illusion for people to think they can live in downtown Toronto in a detached home and not be wealthy," Lamb said. "Ordinary people can't live in central London or central Paris or central New York.

"If you want to live in central Toronto, you're going to have to live in a condo or be a millionaire. That's the reality. ... It's not a bad thing. It's the way cities evolve."

Steve Matthews, a Re/Max agent in Toronto, says inflated prices make it harder for ordinary Canadians to buy houses. (Steve Matthews)

Inflated prices, such as the price fetched by the Willowdale bungalow, do make it difficult for ordinary Canadians to get into the market, no matter who buys the house, said Steve Matthews, a Re/Max agent in north Toronto.

"It skews the market. Now, the person who lives next door and the person who lives down the street think they should get that price, too. It also generates resentment because it makes it tougher for everyone — buyers, agents, banks — so there is a ripple effect that goes beyond the immediate sale."

Foreign students drive market

As more people get exposure to Canada as an offshoot of globalization, the overseas investor market will rise, Hlinka said. As an instructor at George Brown College in Toronto, he has seen an explosion in the number of foreign students.

“When their parents come to visit, they get an idea of what real estate costs here, and they can’t believe how cheap it is. They want to buy because they think it’s a bargain.”

In addition to China, investors pouring money into real estate are flocking to Canada from the Middle East, Korea, Russia, India and the Philippines as well, said Tony Ma, who owns HomeLife Landmark Realty in Markham.

Tony Ma, owner of HomeLife Landmark realty, says buyers from China find Canadian housing prices low, compared with what they pay at home. (Tony Ma)

About 65 per cent of Ma’s agents are Chinese and the bulk of his business comes from Chinese clients. Most are new immigrants to Canada, but about 20 per cent are foreign investors, including parents overseas who buy on behalf of their children studying in this country.

Fewer than five per cent are pure investors with no ties to Canada, said Ma, a former neurosurgeon who moved to Toronto from Zhengzhou, China, in 1998.

"Most of our buyers are part of Canadian culture. I don’t think they are going to push local Canadian people out of the market. When immigrants come to Canada today, they have money, not like when I came to Canada 20 years ago. I didn’t have money."

Last year, buoyed by his strong ties to the mainland China market, Ma’s agency sold 263 homes priced at more than $1 million, with about 40 per cent of those being all-cash deals with no conditions attached.

Chinese drawn to Canada

Canada’s stable government and banking system and the relatively low prices draw investors, he said, pointing out that while condos in downtown Toronto can sell for $800 per square foot, in Beijing, the price is $2,000 per square foot and in Hong Kong it's double that.

Moreover, to control prices, the Chinese government allows each family there to bank finance only two properties — one to live in and one to invest in — and buyers must pay 100 per cent cash for anything above the two-property limit, Ma said.

Not only are prices in Canada more affordable, homes and condos are a better value proposition, since they come ready to move into, unlike in China, where buyers get a concrete shell they have to pay to finish, he said.

“So they see an $8 million house here, they see the quality, they see the finishes and they think it’s cheap," Ma said. "They can move in today.”

Vancouver tops the list with Chinese investors because of the city’s temperate climate and proximity to their homeland, he added.

Janet Sinclair of Re/Max Hallmark Realty Ltd. in the Beaches neighbourhood of Toronto, routinely deals with foreign investors.

“They have driven prices up," she said. "Whenever we launch a new condo downtown we get a number of Hong Kong investors and a lot of people coming over from England. People want to put their money in Canadian real estate because they think it’s safe.”

Sinclair recently dealt with a Hong Kong investor representing a dozen buyers, who happened to be family members from back home. They snapped up units in a new waterfront condo building and are now interested in another project in the Beaches.

She also recently sold a penthouse condo in downtown Toronto to Swiss investors for $1.25 million.

“They didn’t bat an eye at the price. They said in comparison to what they pay in Switzerland, these prices are nothing. Our prices are not scaring them at all."

Builders tearing down old houses

The Willowdale buyer who paid the premium price is stinging from the negative reaction to the sale and declined to be interviewed.

Adelson said the Yonge Street corridor between Highway 401 and Finch Avenue is in demand because of the subway and its proximity to York University and Seneca College. Along with a thriving retail strip and a planned new Whole Foods, 10 new condominium projects are in the works.

The area is a magnet for certain ethnic groups, including people from the Middle East and China, Adelson said.

"It's a cultural thing. Their communities are already there. If you go down to the Danforth, their stores are not there, so that's not as attractive a location for them."

The area is also rife with redevelopment as builders tear down older homes and replace them with monster houses or two smaller units.

That’s just what a buyer from China, who recently bought a tear-down bungalow in the area for $720,000, plans to do, said Al Sinclair, the Hallmark Realty sales representative who sold him the property.

The buyer became familiar with the area through visiting his daughter, a doctor who lives there. He plans to rent out the house for two years until his building plans are approved, then tear it down and build several townhouse units.

“He thinks the Toronto real estate market has a long way to go," Sinclair said. "He’s right."

Only pockets of Toronto are of interest to overseas investors, including North York and the downtown core and not areas like Leslieville in the east end, Adelson said. Although that neighbourhood is considererd hot and the property values are rising, it has not experienced the overheated bidding wars seen farther north.

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.

Toronto Real Estate Market Report: February 2012 Statistics

Following is TREB’s market report for Febuary 2012:  Greater Toronto REALTORS® reported 7,032 sales in February 2012 – up 16 per cent compared to February 2011. New listings were also up over the same period, but by a lesser 11 per cent to 12,684. It is important to note that 2012 is a leap year, with one more day in February. Over the first 28 days of February, sales and new listings were up by ten per cent and six per cent respectively.

“With slightly more than two months of inventory in the Toronto Real Estate Board (TREB) market area, on average, it is not surprising that competition between buyers has exerted very strong upward pressure on the average selling price. Price growth will continue to be very strong until the market becomes better supplied,” said Toronto Real Estate Board President Richard Silver. “It is important to note that both buyers and sellers are aware of current market conditions. This is evidenced by the fact that homes sold, on average, for 99 per cent of the asking price in February,” continued Silver.

The average selling price in the TREB market area was $502,508 in February – up 11 per cent compared to February 2011. The Composite MLS® Home Price Index for TREB, which provides a less volatile measure of price growth compared to the average price, was up by 7.3 per cent compared February 2011.

“If tight market conditions continue to result in higher than expected price growth as we move into the spring, expectations for 2012 as a whole will have to be revised upwards,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “While price growth remains strong, the average selling price remains affordable from a mortgage lending perspective for a household earning the average income in the GTA.”

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.

Toronto Real Estate Market Report: January 2012 Statistics

Following is TREB’s market report for January 2012:  Greater Toronto REALTORS® reported 4,567 sales through the TorontoMLS® system in January 2012. This number was 8.8 per cent higher than the 4,199 sales reported in January 2011. Sales growth was strongest for low-rise home types in the regions surrounding the City of Toronto.

“A favourable affordability picture bolstered by very low posted fixed mortgage rates has kept home buyers confident in their ability to achieve the Canadian goal of home ownership,” said Toronto Real Estate Board President Richard Silver.

“The buyer pool remains diverse in the GTA with strong interest in home types across the pricing spectrum,” continued Silver.

The average selling price for January 2012 transactions was $463,534 – up by almost nine per cent compared to January 2011.

“Low inventory levels have kept competition between buyers strong, resulting in robust annual rates of price growth over the last year. Strong price growth is expected to attract more listings. A better supplied market should result in a slower rate of price growth, especially in the second half of 2012,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager 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.

Toronto Real Estate Market Report: December 2011 Statistics

Following is TREB’s market report for December 2011:Greater Toronto REALTORS® reported 4,718 transactions through the TorontoMLS® system in December 2011. The December result capped off the second-best year on record under the current Toronto Real Estate Board (TREB) boundaries. Total sales for 2011 amounted to 89,347 – up four per cent in comparison to 2010.

 “Low borrowing costs kept Buyers confident in their ability to comfortably cover their mortgage payments along with other major housing costs,” said TREB President Richard Silver. “If Buyers had not been constrained by a shortage of listings over the past 12 months, we would have been flirting with a new sales record in the Greater Toronto Area,” added Silver.

The average selling price in December was $451,436 – up four per cent compared to December 2010. For all of 2011, the average selling price was $465,412, an increase of eight per cent in comparison to the average of $431,276 in 2010.

“Months of inventory remained below the pre-recession norm in 2011. Very tight market conditions meant substantial competition between Buyers and strong upward pressure on selling prices,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“TREB’s baseline forecast for 2012 is for an average price of $485,000, representing a more moderate four per cent annual rate of price growth. This baseline view is subject to a heightened degree of risk given the uncertain global economic outlook,” continued Mercer.

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.

Five For Friday

It's roundup time!  Let's take a look back at some of the more interesting articles and photos that popped up over the past few weeks...

#5.  What Apocalypse? Housing Market Predictions For 2012 [Infographic]

     On December 28th, the folks over at BuzzBuzzHome  posted an informative infographic illustrating the CMHC's major predictions for the 2012 Canadian real estate market. The total number of units is expecting to increase by 1.9% over 2011. And the average price is expected to increase by 1.2% over 2011. Read the full article here.

#4.  Vintage Photographs Of Toronto In Winter

     On January 4th, Dereck Flack of blogTO dipped into the city's digitized archival holdings to present us with a collection of snowy photos from Toronto's past. There are a bunch of wonderful images here, starting with a 12 horse team pulling a snow sweeper in the 1890's, to a snow storm seen from the corner of John & King in 1961. Read the full article here.

#3.  2011 Villain: CityPlace

     On December 19th, Stephen Michalowicz of Torontoist.com nominated CityPlace condos in their year-end quest to name the very best and very worst people, places, things, and ideas that had an influence on the city in 2011. If you're not familiar with CityPlace, they're the buildings that sit at the foot of Spadina St, just south of Front St. The article points to poor build quality, poor insulation, water leaks, and poor planning issues as the reason for the nomination. Read the full article here.

#2.  What You Got In Toronto For $500,000 In 2011

     On December 15th, the Globe & Mail took a look back at the year's home sales and highlighted 10 properties that sold in the $490,000 - $550,000 range. There's everything from a 160 year old coach house in Port Hope, to a detached home in the beaches, to 2 bedroom condo near Church & Carlton. Read the full article here.

#1.  Flatiron Building Sold For $15.3M

     On December 15th, Tristin Hopper of the National Post looked at the sale of one of the city's most beloved structures - the Flatiron building.  The purchasers are a Toronto based company - the Commercial Realty Group. In case you're wondering, the $15.3M sale price works out to about $797.00/sq ft. Read the full article here.

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.

What's In Store For The 2012 Real Estate Market?

Last month, the Toronto Real Estate Board posted the above video to their YouTube channel. In the video, Senior Manager of Market Analysis, Jason Mercer, takes a look back at the 2011 real estate market and a look forward to what we can expect in 2012. Warning: the video is over 25 minutes long! Not to worry - I sat through the entire thing myself and have summarized the main points below (you're welcome).

1.  Where We Are At

• We've seen of approximately 8-10% of price growth over the course of the year.
• Inventory has been tight, resulting in a Seller's Market.
• Record-low interest rates have fuelled a very active market.

2.  Interest Rates

• Rates are likely to remain somewhat flat in 2012.
• This is a reaction to what's happening, economically, south of the border and in Europe.

3.  Jobs And Income Growth

• The unemployment rate has been moving lower, but this trend is flattening.
• A 2% growth in income is expected in 2012, roughly in line with inflation expectations.
• The average Toronto household income will increase from approx $102,000 in 2011 to approx $104,000 in 2011.

4.  Resale Market Outlook

• An increase in the number of sales, from 90,000 in 2011 to 92,000 in 2012.
• This increase in the number of sales is in line with the long-term trend for population growth.
• The number of new listings should rise from 145-150,000 in 2011 to 160-165,000 in 2012.
• More sellers will decide to list their homes in reaction to the strong price growth seen in 2011.
• More listings = more choice for buyers = slower price growth than what we saw in 2011.
• An increase in the average price from $460,00 in 2011 to $485,000 in 2012.
• This amounts to approx 4.5% price growth, year-over-year.
• Moderate price growth will keep affordability in check.

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.