Welcome to Urbaneer.com’s May 2019 Home of the Month! This feature provides a snapshot of the journey one of our Buyers has taken to secure a property purchase in the City of Toronto.
This month’s tale focuses on the purchase by the daughter of Urbaneer clients, who was ready to take the homeownership plunge and buy her first dwelling in Toronto. Given she had witnessed first-hand her parents efforts to secure property near Bloor and Christie two-years-earlier – who locked down a house by bidding 34% over the list price with a bully-offer (that unravelled into a bidding war within 24 hours of coming to market) – she was already primed for the intensity endemic to specific freehold housing properties in the central core of the city.
Yes, dear reader, despite whatever news that comes across your social media feed saying the Toronto real estate market is not as scorching hot as it once was, when it comes to well-situated downtown freehold dwellings (basically north of Lake Ontario to Eglinton & from Victoria Park west to Jane Street) that have a market value under $1,500,000, the demand continues to outstrip the supply.
On Supply & Demand For Centrally-Located Freehold Housing
My buyer began her search in earnest in April 2018. That it took a year is not unusual, in part because there is a large cohort of buyers aggressively competing for property in this price point. Many are couples who have owned their condominium for 4 to 7 years. They’ve seen substantial gains in the condo market while the freehold housing market has remained stable in property values. Because of the financial equity they’ve built through condo ownership, they’re in a position to extract said profit and climb the property ladder into the central freehold housing market, putting the minimum 20% down payment and securing a dwelling in a family-friendly neighbourhood. This piece shares the scoop in Here’s What’s Happening With The Toronto Condominium Market.
There is also a large group of buyers who are getting assistance from their family, either in the form of a loan or a gift to secure a house. This Bank of Mom and Dad phenomenon has helped keep real estate values stable in the central core. One of the reasons is that the family – in particular, the parents whom will imminently become grandparents – don’t want their kids moving to the suburbs where the commute via the gridlock highways will impact the ease and frequency of seeing the next generation. So to ensure their kids are nearby, they’re helping them out with the down payment so they can be closer. Also, let’s face it if you have sufficient funds to help your kids buy a property in the central core, why wouldn’t you? You’re effectively ensuring their financial security by helping them buy a highly-coveted parcel of land in a city that is forecasted to explode exponentially in population and density. Here’s my post called How The Bank Of Mom And Dad Is Stabilizing Canadian Real Estate Prices.
And let’s not forget the shelter industry itself, including flippers and infill developers, where enough precedent has been set across the central core that you can pretty much buy a dilapidated dwelling and either gut it or rebuild and be assured a profit. Here are two posts that offer more insights on this in Ten Toronto New Builds That Recently Sold For Between $2M And $10M – and – How Toronto Real Estate Near Queen Street – East & West – Is Climbing In Value.
The Bidding Wars, Managing Expectations & Fatigue
Trust me, sleuthing for a house in this price point requires you to be fully committed to dropping whatever you’re doing to see a house within hours of it coming to market. You also have to become accustomed to having your realtor gently tell you that the dwelling listed for $999,000 is likely to spike into a range that is beyond your budget, and that there will be times when you’re so exhausted and fatigued from being consistently knocked out in the bidding war you will want to give up. If you’re new to the market – or not, here’s some sage advice About Holdbacks On Offers, Bully Offers & Bidding Wars For Buyers – and – The Four Values Of Real Estate For Bidding Wars And Bully Offers In Any Market Climate (Plus Cats!).
My Buyer’s Search Criteria
The search began in earnest back in April 2018, when a charming 3bed semi-detached house with basement apartment located north of Bloor west of Christie caught her attention on realtor.ca. She popped me an email because it ticked a lot of the boxes on my buyer’s wish list. However, as is often the case when one is beginning their search in a competitive market, the process of competing quickly was overwhelming. And respectfully so. I do not want any buyer feeling pressured or rushed when making such a significant purchase. In fact, I prefer my buyers to have at least one night’s full sleep so they can awake to let their intuition guide them on whether the property is the right one or not. It is essential you feel confident in proceeding with a buy right from the get-go, as the potentiality for mitigating factors influencing your decision moving forward need great confidence and certainty when proceeding.
However, the property did set the foundation for her search criteria, which was for a 3bed 2bath row, semi or detached upgraded or renovated dwelling with either a basement apartment or the possibility for one without great expense (like having a separate entrance into the basement already present). Her preference was for the central west side of downtown, spanning from Spadina west to Symington, and from Lake Ontario north to Dupont. Her budget did increase during her search – which is not unusual – to top out at a sum of $1,400,000.
My buyer took a page from my own real estate handbook, in her willingness to secure a property she could eventually grow into but, in the interim, would accommodate both herself and her current roommates in addition to a lower level income suite. Here are my posts on Single And Home Hunting In Toronto – and – Dear Urbaneer: How Can Millennials Possibly Afford To Buy Real Estate?
The Dwellings She Bid On
Here are the four properties that she pursued in competition, plus one exception whereby the listing realtor shut us out of competing.
Lansdowne Avenue – November 5th, 2018
List: $899,000 Sold:$1,075,000
This 3bed 2-bath semi with onsite parking and a recently renovated lower level suite was surprisingly spacious, had excellent proportions, and some intelligent upgrades. It also was ready for the next buyer to personalize which is appealing for many, who would rather add their own ‘pretty’ than buying something fully renovated which leaves less opportunity to imprint one’s personality.
This dwelling garnered 6 offers and spiked to a precedent-setting sum for a busy arterial road opposite a development site.
Brock Avenue – November 19th, 2018
List: $999,000 Sold: $1,350,000
This detached 3bed 2bath house located north of Bloor west of Lansdowne had a dug-down newly-renovated lower level and oodles of character within the original space plan. It had that insouciant charm that grabbed one’s attention the moment one crossed the threshold, which is rare for our hundred-year-old housing stock. Typically, housing stock this old, particularly in former working-class immigrant neighbourhoods, have undergone changes that have resulted in the loss of original features.
The level of interest on this property was significant, with 8 offers competing on the offer date.
Northumberland Street – February 2019
List:$889,000 Sold $1,120,000
This charming row house located north of Bloor west of Dovercourt came to MLS with an offer date posted a week later. As I do when a property is of interest to a buyer I reach out to the listing realtor and inquire whether “I should have any concerns the Seller might consider a bully offer”. When the realtor replied evasively, she was basically implying it was a possibility even though the MLS listing should have clearly stated that the “Seller would consider pre-emptive offers”. When I called to book a return visit, the appointment desk for the listing broker told me a bully offer had just been registered, even though protocol says when a bully offer is registered, the listing realtor is supposed to contact all the realtors and buyers who have viewed the property to let them know one has come in. Despite this egregious error, I immediately reached out to the listing realtor and communicated that my buyer was interested but because I was currently in a commitment, but I could procure an offer within 3 hours. The listing realtor followed up 90 minutes later to inform me the property was sold firm and binding for a sum that was less than what my buyer was willing to pay. This lack of protocol occurs with surprising frequency in the Toronto real estate market, which is frustrating for both buyers and their representatives alike.
Alhambra Street – March 18th, 2019
List: $1,098,000 Sold:$1,385,000
Situated south of Bloor Street west of Dundas West, this renovated 3bed 2bath semi with laneway garage had undergone a main floor renovation including new kitchen and had a finished basement that was in good condition. The property is steps from the subway and UPExpress to Union Station, in a coveted family-friendly pocket. I liked the property a lot, of which this buyer and another Urbaneer client competed against six other prospective purchasers to secure the dwelling.
Unfortunately for our clients, one buyer pushed the price envelope of the dwelling to a new precedent-setting sum on the street for a semi-detached house.
Statistics & Counts
Here are the statistics of these four sales, which reflect the days on market, and the difference between the asking and sale prices.
THE WIN – Lappin Avenue – April 10th, 2019
Finally, along came a residence match that was meant to be.
This 3bed 2bath home is situated in Wallace Emerson, which is north of Bloor Street between Dufferin and Lansdowne. This north-west quadrant of Bloor Dufferin is the last of the four quadrants to gentrify, which means the other three locations – including highly coveted and costly Dufferin Grove – are already supporting a future higher value. Furthermore, this dwelling is located just south of the Galleria Mall which is slated to become a high-density condominium community with significant capital investment into green and community recreation spaces which you can read about in City Council Approves Rezoning for Galleria Mall Redevelopment. As far as I’m concerned, the neighbourhood is a future Triple AAA location. After all, with eight residential towers being constructed on the site comprising a total of 2,846 residential units, there will be around 5000 pairs of eyes looking over the existing freehold houses, of which many will be eyeing as their own potential future purchase, making it an intelligent buy.
Although cosmetically this home reflected the specific cultural vernacular of its prior owner, what was truly evident was the clear pride of ownership and apparent deep investment in quality throughout the property by the Sellers. This was a dwelling which was maintained to a very high standard by its owner who was a professional in the building trade. As is common in the neighbourhood, the owner’s extended family live nearby, and he generously made himself available to guide my buyer and her family through the home to help them understand the various improvements and installations he had made in the interest of continued ease of maintenance and longevity of the dwelling, in addition to making a wonderful introduction for our buyer into the fabric of her new neighbourhood community. How fabulously welcoming is that?!
This home truly did check off all the boxes – well situated with respect to her commute to work, fully detached, in outstanding turn-key condition, with detached two-car garage with ample storage (and as an added bonus, a fantastic outdoor kitchen perfect for summer dining al fresco), a basement with separate entrance and high ceilings, gas fireplace and full bath ideal for quick conversion to a lower level suite, three generously sized bedrooms on the second floor and a terrific entertainment area plus a spacious eat-in kitchen with walk-out to the backyard patio area – who could ask for anything more?
Here’s some snaps from MLS of this listing:
Priced at $999,000, our well-informed buyer didn’t take any chances, submitting her strongest offer against 6 others and secured the property for $1,376,436.
Congrats to our Buyer!!!
Are you, or someone you love, considering a Toronto real estate purchase?
Here’s a step by step summary of how I analyze listings of merit for my clients, including the preparation and delivery of our comprehensive due diligence packages for every property our Buyers identify as a possibility:
Did you enjoy this? You may also like these informative Urbaneer.com blogs:
Thanks for reading!
Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
Bosley Real Estate Ltd., Brokerage – (416) 322-8000
– we’re here to earn your trust, then your business –
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Buy Of The Month