Urbaneer.com’s ‘Home Of The Month’ feature is a post showcasing what our Buyers have recently purchased in the current City of Toronto marketplace.
The pocket of High Park North is an enclave of Victorian and Edwardian homes set in a lush landscape of mature trees running north of High Park proper and the Dundas and Keele subway stops on the Bloor subway line. It’s also beside the reviving neighbourhood further north called ‘The Junction’, which is one of the next gentrifying bastions of hip, and where all the cool kids on a budget are buying. In fact, this house is arguably straddling both of these neighbourhoods and can claim either name as part of its locational status. Click HERE to view a past Home Of The Month feature on The Junction, and another marvelous opportunity for one of our urbaneer.com clients.
Regardless of your budget, when it comes to securing a location, we encourage our Buyers to locate as close to ‘village shopping amenities’, near ‘green space’, and within easy access to ‘public transportation links’. These three locational features are in high-demand for those embracing downtown living. Of course, this doesn’t always mean you’re going to find the property of your dreams in exactly the place you want to live, but the more cognizant you remain of these locational ‘triple wins’, the more likely your property will be coveted by the market at large.
In the case of our Buyers, a young couple making their first real estate purchase, after exploring their housing options they decided to purchase a central west-side freehold property at, or around $500,000, that didn’t need an immediate major cash injection to bring it up to ‘livable’. Although initially they had considered purchasing a condominium or a stacked townhouse in the $400,000 range, we encouraged our Buyers to stretch their budget in order to gain entry into the downtown freehold housing market. Why? Because in the long run they would be saving money.
By leveraging themselves into a $500,000 house in an established neighbourhood, instead of a $400,000 condominium in the urban jungle, it effectively eliminated the inevitable move that comes when baby makes three and larger accommodations in a more family-friendly location are required. Remember, there are significant costs associated with climbing the property ladder, including the fees payable to lawyers, lenders and realtors, plus the rather exorbitant City and Provincial land transfer taxes. For example, had these Buyers purchased a $400,000 condominium and then, in a few years, sold it to acquire a $650,000 house, the total charges for the two transactions (selling the condominium and buying the house) would be in excess of $42,000. Would you avoid that expense if you could? Along with an investment in foresight, these Buyers had to increase their property budget by $100,000 simply to afford the minimum price of admission for the privilege of owning a freehold house in the City. To their credit, their forward-thinking strategy has saved themselves a significant future expense along with the hassle, time and energy required to coordinate a second purchase and move.
If you’ve been following market values, you know that finding a house in move-in condition for $500,000 in the old City of Toronto is almost impossible. In fact, there were times during our search when it felt downright bleak. Most of the properties we viewed along the St. Clair West corridor, and in the Wallace Emerson neighbourhood were either structurally compromised and of questionable condition, or required significant capital improvements to the tune of tens of thousands of dollars. Which makes sense in a city of one hundred year old plus working and merchant class housing that has sheltered millions of poor immigrants and their families on their way to a more prosperous life. As most anyone who has endeavoured to purchase a dwelling during a real estate boom can attest, you have to see a lot of wrong before you come across right. All Buyers eventually reconcile that with a lot of patience and a little luck the perfect opportunity will ultimately present itself. Certainly in this case, after being consistently let down by the buildings’ states of disrepair, their marginalized locales, and the precedent-setting sale prices fueled by the bidding wars, when my Buyers and I crossed the threshold of this 1930s residence, we instantly knew this gem of a house married condition, location, and value for dollar. Also of merit, this vintage house with its warm wood floors and character trim cast its own emotive magic spell that whispered “Home” to my Buyers.
And yet, as required of any Buyer who is limited by budget, there were compromises to be made-and opportunities to be found.
The greatest challenges?
This all brick semi-detached house was situated on an arterial road that has its fair share of traffic, and it contains just two bedrooms.
Although the street is busy, the back yard is astonishingly quiet, secluded, sun-drenched, and features the somewhat rare benefit (and $25,000 value) of on site parking. And while the busyness translated into a lower value than if it was located on a residential side street, the recent sales of two Victorian row-house neighbours for $737,000 and $741,000 just doors away served to reinforce both the desirability and demand for this location. Following one of the cardinal rules of real estate, this house is anchored by more expensive dwellings.
The second mitigating factor impacting its perceived market value are its two bedrooms. I’m not sure if you’re familiar with this fairly classic Toronto layout, but on the main floor the house has three rooms (living, dining and kitchen), while on the second floor the two bedrooms and bath are contained within the floor plate of the living and dining room below, and in lieu of a third bedroom situated on top of the kitchen, this house simply has a flat roof.
Yes, a flat roof that, with money, permits and materials can become a third bedroom.
The lesson? Never overlook the obvious.
While countless buyers dismissed the house for having just two bedrooms, prompting the Sellers to reduce the list price from $529,900 to $499,000, just two weeks earlier on the same block a three bedroom semi-detached Edwardian house with parking had gone into competition and garnered at $600,000 price tag. Having few discernible differences beyond the number of bedrooms, the $100,000 difference in the sale prices essentially represents the added value of a third bedroom.
That one can prudently construct a third bedroom addition on this house for less than $100,000 illustrates how a perceived negative can discount a property’s market value by a sum that exceeds the actual cost. Because the buying public at large dismissed this two bedroom house, the price was reduced so it fell within the affordability of my Buyers and provided entry into market. By purchasing this with a long term vision, now they have place that meets their immediate needs which can be enlarged as they expand their family, while increasing the value of their home and building equity.
Featuring a 16×90 foot lot with parking, a partially finished basement with a decent ceiling height, and building components that were in very good nick, my Buyers negotiated the purchase within a day of the newly reduced $499,000 list price. Thank goodness they moved quickly, for there have been few listings in such a premium location and solid condition that have come to market in this price point since.
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If you, or someone you know, has particular real estate needs, wishes and desires and requires assistance, please know we’re here to help at urbaneer.com.
~ Steven
Buy Of The Month
