Welcome to our latest Tales From The Real Estate Trenches, where we share a little behind-the-scenes freneticism of the market.
Now I promise not to whine, or throw a tantrum, but the frenetic pace of the Toronto real estate market right now is exasperating and exhausting. Yes, we realtors are feeling pretty spent right now, as the market is hyper-oscillating 24/7 with no end in sight. But it's our occupation and, well, we roll with the punches. Truth be told, it's our Buyers who are really feeling the stress. There is no joy right now in finding a place to buy and call Home. Even though the spring market has been intense for a number of years, it just seems far more wicked than ever before (and this is my 26th year of selling). In a market like this, the term 'house hunting' seems awfully apt!
Image courtesy of Definition Of Magic blogspot.ca
Sharing The Loss
The other night I was one of 19 realtors chasing the dream for our delightful first time buyers – let's call them Nick and Nora, a double-income couple “who make good, but not great money” with 2 very young kids who require childcare in a city where it's extremely expensive – who made a grand gesture to secure this 3-bedroom detached home near Symington and Dupont. Listed at a very compelling price of just $599,900, this property landed at an astonishing $896,000! Yup, that's 49% over its list price. Now, make no mistake: this property definitely oozed charm, in an understated 'not-too-done' way. The Seller had thoughtfully retained the patina of its past – which I can assure you is rare to find these days. So many properties are being ruined with the installation of those ubiquitous big box kitchens that everyone seems to jam into our vintage housing stock. But, I have to say, this wasn't 'renovated'. It was an 'upgraded' 3bed 1bath house with an unfinished basement and no onsite parking. Needless to say, our Buyers were devastated to lose in their fifth attempt during our search together, especially when their offer was a respectable 40% over the asking price! Yup: 40%!
Our hearts go out to Nick and Nora. As they started their search they, like every Buyer, began optimistic and idealistic, not knowing that the 'asking price' is a Toronto real estate strategy to entice you into believing the property is actually within your means. Even if you've heard about bidding wars and bully offers (or believe you're fairly educated on the Toronto real estate market) nothing prepares you for being slaughtered by another young couple (maybe even with a kid in tow) who looks just like you. Here's a post from last year which has just as much relevance today as when I wrote it last year: Toronto Real Estate And The Spring Weather Mob.
Five weeks ago Nick and Nora submitted a bully offer – meaning they didn't wait for the offer date posted on the MLS listing but submitted a pre-emptive bid with a sum they hoped was sufficient to entice the Sellers to accept. Unfortunately, their bid was about 50k shy of the next bully offer which snapped up this Leslieville semi (listed for $639,900) for 23% over its list price to land at $790,000. Was this house nice? Yes. It had 3 beds, and owners who respected the integrity of the house, keeping some of the architectural features coveted in a vintage home with a sensitive renovation. But it didn't have parking.
Thinking perhaps Leslieville might be too rich for their budget, Nick and Nora set their sights on this Danforth East bungalow perched right on top of the subway line. Yes, they were willing to compromise with rumbling floors every two to six minutes in order to secure a detached house. As it turned out, 17 other Buyers felt the same way. Granted it was on a large 35×122 foot lot, had an income supplement, and that 30's arts and craft charm we don't see very often anymore. Listed at $729,000, this house skyrocketed to $990,000, or 36% over its asking price.
Defeated, but knowing in this climate there really isn't much time to regroup, Nick and Nora hopefully fell in love with this 'cottage in the city' located near Danforth and Woodbine two weeks ago. With two bedrooms in the attic, one on the main, plus a finished lower level income supplement, the front facade was a little deceiving. It also had a lush 48×105 foot lot, and was located across the street from a park, which always garners a premium. Listed for $749,000, it attracted 13 bids to soar 29% over the asking price at $965,000. Yikes!
Tired, but highly focused, last week Nick and Nora went after this renovated 3bed Upper Beach wide-design semi which came to market at $729,000. There's no question it was exceptional or, as the listing realtor cleverly claimed “The Large Principal Rooms, Finished Basement And Inviting Outdoor Space Complete The Trifecta Of Easy, Family Living“. But no one – outside of the winning Buyer – anticipated it garnering $915,000 or 26% over the asking price. Yup, ten offers and a new precedent-setting price for the Upper Beach.
Right now Nick and Nora are holding steady (and have since viewed several new listings), though they'll admit it's been an emotional roller coaster of a ride. And they're not the only ones. In this highly charged market, where the supply of houses drastically exceeds demand, under the veneer of social niceties you can see Buyers eyeing each other with a hint of disdain. Each wonders who will be the one to pay one dollar more than they have, resolved to a diet of Kraft Dinner for the next 12 months, because this is what it's come down to. For those who say the market is going to crash, all we can say is that this real-time experience reflects the demand for downtown Toronto real estate in the under $1mil price category. After all, if these houses are inciting bidding wars of ten to eighteen offers, the math dictates that there are a lot of Buyers that still have to purchase before the market even stabilizes.
We have some great past reads in our Dear Urbaneer series that may be helpful if you're in any way engaged in Toronto's real estate market, including: What’s Behind This Crazy Toronto Real Estate Market?, Why Is The Toronto Real Estate Market So Hot? and Why Is It So Hard To Buy The House I Want?
The market is challenging for everyone, but especially for for the first and second time buyers seeking a downtown freehold property. Here's a recent post explaining why this is, in our February 2016 Home Of The Month Feature that shares the tale of a young family in their quest to secure a family home.
Are you a first time buyer? Check out this very recent blog: I Need A Crash Course In First Time Home Buying.
While we don't mean to discourage anyone who is still searching for their 'Dream Home', we've always said that your best weapon in the house hunt is information; a well-informed Buyer is a well-armed Buyer. Do your homework – by letting us help you. With over two decades of experience, here's Why I’m A Top Ten Realtor. Let my team and I steer, guide and counsel you gently with all the variables that make up a real estate purchase. Here's more About Us, and some of our recent Testimonials!
Welcome to the spring market! And please know we're here to hold your hand.
Have questions? Just pop Steve@urbaneer.com an email!
~ steven and the urbaneer team
we're here to earn your trust, then your business.
Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
Bosley Real Estate Ltd., Brokerage – (416) 322-8000
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Tales From The Real Estate Trenches