Welcome to my blog on housing, culture, and design! I’m Steve Fudge and I’m celebrating 34 years as a realtor and property consultant in Toronto, Ontario, Canada.
We know property owners are being impacted by rising interest rates, particularly those with variable-rate mortgages. And in April we demonstrated this is translating into financial losses for property owners, when we posted Over A Recent 90 Day Period, I Discovered 1 In 4 Sellers Of Downtown Toronto Lofts Lost Money.
The bleeding isn’t quite – but is nearly – as bad in MLS District E01 (the area spanning from Lake Ontario to The Danforth, and from Coxwell west to the Don Valley) where I found nearly 1 in 5 loft Sellers in MLS E01 sold with losses ranging from 2% to 15.8%. Also quite telling is that some Sellers had owned their units since 2017.
Between January 1st, 2024, and August 28th, 2024, a total of 43 condominiums designated as ‘lofts’ in MLS District E01 were sold. The sale prices of these 43 lofts ranged from $539,000 to $1,299,000. Of these sales, nearly 1 in 5 Sellers – who purchased as long as 7 years ago – lost money after taking into account their buying, upgrading (if they did any improvements) and selling costs as follows:
246 Logan Avenue
Previous Sale – August 2020 – $655,000
Sold – May 2024 – $675,000
Buying & Selling Costs Est: 50k –> $30,000 loss
90 Broadview Avenue
Previous Sale – March 2021 – $935,000
Sold – January 2024 – $862,500
Buying & Selling Costs Est: 75k –> $147,500 loss
245 Carlaw Avenue
Previous Sale – November 2019 – $840,280
Sold – April 2024 – $880,000
Buying & Selling Costs Est: 70k –> $30,000 loss
233 Carlaw Avenue
Previous Sale – September 2017 – $845,000
Sold – April 2024 – $899,000
Buying & Selling Costs Est: 70k –> $16,000 loss
1173 Dundas East
Previous Sale – July 2020 – $870,000
Sold – May 2024 – $898,000
Buying & Selling Costs Est: 72k –> $44,000 loss
88 Colgate Avenue
Previous Sale – November 2018 – $683,500
Sold – May 2024 – $718,000
Buying & Selling Costs + Upgrades –> 20 to 30k loss
233 Carlaw Avenue
Previous Sale – March 2019 – $608,000
Sold – August 2024 – $595,000
Buying & Selling Costs – Est. 46k –> $33,000 loss
326 Carlaw Avenue
Previous Sale – July 2023 – $770,000
Sold – July 2024 – $810,000
Buying & Selling Costs – Est. $63k –> $23,000 Loss
A Few Drops In The Ocean, Or The Crest Of A Wave?
The data has been showing price declines for quite some time, but because many Sellers have been digging in their heels while Buyers went on vacation, the price adjustments were very subtle until Spring crested into Summer, bringing the market on its knees. In this MLS District, three area condominium complexes I’ve been tracking have seen price declines that range from 17 to 18.4% since the height of the Toronto real estate bubble in Spring 2022. However, each of these addresses currently has units listed for sale at sums that are less than earlier selling prices. This signals further price declines.
In a shifting market, we look for sales anomalies that prompt us to raise our eyebrows and go ‘What?”. However, because realtors have taken to relisting the same property multiple times to keep bringing it to the top of the feed on Realtor.ca, unless one is really familiar with the pool of properties on the market it can be easy to miss what has become a subtle downward cascading of values. When we listed a Soft Loft at the end of April this year we called So Sweet Ya Gotta Brush Yer Teeth – On Colgate Avenue In Leslieville, although the market was certainly tepid over a span of 5 weeks, the dozen sales of 2-bed or larger condos in MLS E01 garnered between 95% and 111% of their asking price – which isn’t unusual in our current market conditions.
However, at the end of May we noted a sale where the Seller accepted a substantially discounted offer. The property was in a recently registered condominium on Queen Street East that had sold for 93% of asking, and as we dug a little deeper we saw it had been previously listed 4 times for sums up to $150,000 more. Furthermore, the sale price was 5% lower than a similar unit that sold 60 days earlier and, unfortunately for the Seller, it was for a sum that was lower than what they had paid the developer. So we flagged it.
Then, 3 weeks later in mid-June a Seller sold their ho-hum 2-bed 2-bath condo with parking in a high-density development for 12% less than a comparable unit just 90 days earlier. Because of the high turnover in these buildings, this sale looked like a typical trade until we noticed it was larger than many of the standard layouts. As we dug deeper, we flagged it as an anomaly too.
Then, a week later a Seller sold their luxe hard loft for 20% less than an inferior sale in the same building in May. And it had a value-added terrace to boot! This sale was a bit alarming and became the third anomaly of what would become a growing list. Over the course of four weeks we tracked a condominium selling for 5% less than a comp 60 days earlier, followed by one selling for 12% less than a comp 90 days earlier, and then one for 20% less than a sale just over 30 days earlier. The percentage of discounting was becoming amplified and the speed at which it was occurring was disconcerting. Given every sale causes a ripple effect in the market, it portends condominium Sellers are in for a rocky road.
Right now, the going rate for condominiums in quality buildings completed within the past decade in MLS E01 are garnering around $1000 per square foot more or less. In contrast, this past March the going price per square foot was around $1250 per square foot. Sadly, this means many condo owners who purchased their property over the past 5 years would either break even or be in negative equity if they were to sell.
I’m not new to the real estate rodeo and, as I wrote in When Dreams Of Domesticity Became Nightmares: A Recollection Of The 1989 Toronto Housing Market Crash, in 1989 it took six years for Toronto real estate prices to stop their decline and another four years for them to flatline before the next Boom Cycle began in 2000. Right now we’re in Year 3 since the Bank of Canada began increasing interest rates and, based on the number of households who have yet to renew their existing mortgages currently at a crazy low interest rate (about 50% of Canadian mortgage holders), we may see further declines in values.
This is heart-breaking because, according to an opinion piece in the Globe & Mail called Canada’s Housing Crisis Is Fueling A Population Crisis “Canadians now spend more of their incomes on housing than almost any other country in the world. Between 1980 and 2020, housing prices in Canada rose by 746 per cent, far outpacing the median household income, which grew by less than half of that. And then housing prices soared another 50 per cent during the pandemic.” This was never sustainable.
Unfortunately the momentum of global capital investment into Canadian real estate and the appetite of Canadian lenders to take on more risk kept this reality shrouded from public awareness. The majority of people struggling right now or taking financial losses was through no fault of their own. It’s in many ways a repeat of 1989.
If you would like to read more about my take on the Toronto real estate market, here are some other insights that may be helpful:
Dear Urbaneer: Has The Toronto Real Estate Market Gone SLO MO?
It’s A Different Toronto Real Estate Market, Folks!
Is The Toronto Real Estate Market Crashing?
Dear Urbaneer: Who Is Buying Toronto Real Estate In 2023?
Dear Urbaneer: Which Property Owners Are Selling Their Toronto Real Estate Now In 2023?
Dear Urbaneer: A Question About Letters Of Opinion And Estimating Fair Market Value
If you want to learn more about loft living, check out these past Urbaneer.com articles:
Exploring Vintage Brick & Beam Factory Conversions & Concrete ‘N Cool Contemporary Lofts In Toronto
Edwardian Architecture At Printers Row Lofts In Riverdale, Toronto
How Urbaneer’s Custom Marketing Program Sold This Authentic Broadview Loft In Riverside, Toronto
What Is The Difference Between A Hard Loft & A Soft Loft?
The 8 Largest Loft Condominium Conversions In Toronto
Before & After: A Builder Grade Toronto Condo Goes Back To Its Factory Roots
A Conversation About Corner Store Conversions In Toronto
12 Recent Adaptive Reuse, Live/Work, Storefront & Coach House Conversion Sales In Toronto
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Since 1989, I’ve steered my career through a real estate market crash and burn; survived a slow painful cross-country recession; completed an M.E.S. graduate degree from York University called ‘Planning Housing Environments’; executed the concept, sales & marketing of multiple new condo and vintage loft conversions; and guided hundreds of clients through the purchase and sale of hundreds of freehold and condominium dwellings across the original City of Toronto. From a gritty port industrial city into a glittering post-industrial global centre, I’ve navigated the ebbs and flows of a property market as a consistent Top Producer. And I remain as passionate about it today as when I started.
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Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
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Celebrating Thirty-Four Years As A Top-Producing Toronto Realtor
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