Housing Market Goes on Roller Coaster Ride in Toronto

Some of Toronto’s prime neighbourhoods do indeed march to the beat of a different drummer. Between May 2008 and August 2008, home sales in Lawrence Park and Leaside went down by 13% and 29% respectively, compared to the same time period in 2007.
However, once again the average sale price managed to go up in both these neighborhoods in the same time period. It would appear that buyers in these two Toronto neighbourhoods have a much different view of the future of the real estate market.

In Leaside the average sale price of homes rose by 7%, while in Lawrence Park prices went up by 22%. Strangely enough, Davisville Village located besides these two neighbourhoods, also had home sales go up 1%. However, the average sale price of homes decline by 5%.

Talk about all real estate markets being local! Davisville Village and Leaside are separated only by Bayview Avenue. I would love to know if economists have coined a new term for such contradictory market conditions, such as “confused housing syndrome”. 

Why is it that home sale prices are still going up in Leaside and Lawrence Park?

In talking to a mortgage broker who handles a high volume of loans for buyers in these two neighbourhoods, he said that buyers often qualify for up to 50 per cent more than the amount of the loan for which they are applying. This partially explains why many Leaside and Lawrence Park home sellers continue to receive offers above the asking price, at a time when the Greater Toronto housing market is showing a decline in both the number of homes sold and the average sale price.

Read the rest of this article »

Toronto Housing Market is Falling, or Is It?

The Toronto housing market has shifted to a lower gear. The last ten years have been nothing short of frenetic, and in the opinion of many, just plain insane. And there is really no other way of characterizing the buying and selling frenzy we are all so familiar with, such as a Toronto condominium at Yonge and Lawrence that sold for more than Five Hundred and Forty Thousand dollars above the asking price! This example is by no means an isolated case.

In the last seven years I have witnessed many similar sales – enough to fill a book. The trouble is that when we try to make sense of it all, there is so much information and varied opinions from experts, that it becomes next to impossible to get a clear picture of the Toronto real estate market.

Here are some recent comments on the state of the Canadian housing markets by three noted economists.

Royal Bank economist Paul Ferley thinks that 2009 will finally bring a significant drop in Canadian activity, but nothing like the U.S. collapse, with starts (new construction) down by about 15 per cent. Benjamin Tal, a senior economist with CIBC World Markets, predicts prices will continue to fall across the country with Alberta leading the way.

Read the rest of this article »

National Post Newspaper Finds Housing Grows Cheaper

I love headlines … sometimes.

A few days ago I saw this headline in the National Post, “Housing Grows Cheaper.” Cheaper than what … a Boeing 747?

As far I know, Toronto housing has not been cheap, from a buyer’s point of view for a very long time. Would most buyers consider a 60 year old, 700 square foot bungalow, in need of new bathrooms and kitchen priced at $550,000 cheap?

With all due respect to the Desjardins Group which produced the Desjardins Affordablity Index,  buyers do not have to check this index to figure out that they simply cannot afford to enter the market at these price levels. The Desjardins report warns consumers “not to get too excited about the market conditions because affordability is still close to the record low reached in 1990.” This has not been my experience. We are still way above the 1990 “record low level.”

In today’s Toronto real estate market, the only option that many buyers have is to get into a condominium, and this is a perfectly viable solution for many of them.

However, a great number of buyers would prefer something similar to the proverbial “small house with the white picket fence” instead. And this dream seems to move farther and farther away for the majority of first time buyers.

I see signs that a saner and more balanced market is starting to emerge, especially in the overheated prime neighbourhoods in central Toronto.

Housing markets, such as the one we have all been through in Toronto in the past ten years, have always divided home buyers and sellers into winners and losers. There is no middle ground. Hopefully we are starting to enter a time where we will be able to see a smile on both buyers and sellers faces.

RELATED ARTICLES:
Toronto Housing Market is Falling, or Is It?

Lawrence Park Home Takes 10 Years to Sell

No, this is not a typo – a house in the Lawrence Park area in Toronto (*) just sold after being on the market since 1998!

I want to share with you the main lesson learned from this unfortunate experience, so that you won’t make the same mistake yourself.

The big question, of course, is why it took ten years to sell a home in the midst of the longest real estate boom in Canadian history. 

The answer, in a nutshell, is that the house wasn’t priced right. In fact, the owners went through a total of six real estate companies, listing their home 26 times on the Toronto MLS and changing their listed price a whopping 34 times!

Without a doubt, pricing your home correctly from the outset is of critical importance, especially in a softening real estate market such as the one we’re in now. The seller initially priced the house “ahead of the market”, and continued to do so throughout the ten-year period. Essentially, the listing price was above what buyers were willing to pay at any given time. 

Real estate agents cannot perform miracles, even during a boom. A house listed at 7-to-10 percent (or higher) above the true market value simply will not sell. Today’s buyers are market-savvy and can find out all the information they need to reach their own conclusions about a home’s value. 

This is always true in any real estate market, whether it be in a large city like Toronto, or in a small town like Wapakoneta, Ohio.

The moral of the story is to pay close attention to the mood of the market. Have your agent do her homework, prepare your home for maximum appeal and finally, DO price your home no higher than 2 to 3 percent of other comparable homes that have sold recently in your neighbourhood.

Or, like the unfortunate seller in Lawrence Park, you might be celebrating a ten-year anniversary, too!

(*) The photo shown above is not the home referred to in this article.

RELATED ARTICLES
Announcing the Death of For Sale by Owner

Are Home Sellers Obligated to Disclose If There Has Been a Death or Violence in Their Home?

Last year in Florida, the new owners of a home were shocked to learn from some of their neighbours that the home they had purchased had been the scene of multiple murders and suicide.

Florida law allows real estate companies not to disclose information about a house if such details would tend to “stigmatize” the property.

In the U.S. only half of the states have disclosure laws, Florida not being one of them.

Barry Lebow, a Toronto educator and real estate appraiser said, ”Quebec has disclosure laws, (about disclosing stigmatized information on properties) while to the best of my knowledge the rest of the country is a free-for-all.”
 
Lebow has called on Queen’s Park to enact a law requiring a vendor ( home seller) to disclose events that could stigmatize the property.

The province of Ontario and the Federal Government have enacted many new laws to protect prospective buyers when buying a home. In this case however, in Ontario it is still “buyers beware.”

Will the Internet Make Real Estate Agents Obsolete?

A few years after the internet started becoming one of the most powerful tools for home buyers and sellers across North America, many in my industry feared that this new tool would put an end to their real estate careers.

I did not share those feelings.

Here is an article by Marc Davison, a marketing expert, on the value of real estate agents’ services (the good ones). This article was first published under the title: “Why agents will one day rule the real estate world.”

The future has never looked brighter!

Why agents will one day rule the real estate world

Karen is my travel agent.
Her services cost me $40.00 per flight.
Those services save my life.

I email Karen my travel particulars.
Within the hour, she sends me an itinerary.
I approve, she books. Runs my card. Done.

I have no interest in using the web for travel anymore.
It’s anything but empowering.
It’s not even fun.

Empowerment is delegating arduous tasks to a professional.
Someone who possess a core expertise in that which you are novice.
And produces results faster and better than you can.

Spending time booking a hectic travel schedule is not empowering.
Zaps time better spent on other things.
Playing Wii with the kids. Jogging. And after drink with my wife and wishing the moment could last forever.

Real Estate

I’m done searching for homes online.
It’s cumbersome, confusing and no longer fun.

Search sites have now narrowed it down beyond simplicity.
With advanced search filters galore.
And maps with little blue markers.

I struggle to get passionate about that.
Or believe that it is the best experience the web can provide.
Or that it gets users any closer to what they really want.

Surveys say consumers research for months prior to calling an agent.
Then, during a ten minute phone call, they tell that agent what they are really looking for.
A home with an artistic vibe to it. Close to a Montessori school.
In a neighborhood where there are other kids.

And I wonder, why don’t we just do that from the onset. How can a web search possibly find vibe?

Read the rest of this article »

Davisville Village Senior Killed on Mount Pleasant Road

An 82 year old woman was struck and killed on Saturday morning as she crossed Mount Pleasant Road at Balliol. The victim lived in a nearby senior’s residence. A large moving truck had stopped at Balliol Street and was turning north onto Mount Pleasant Road. According to witnesses, the driver may not have seen the senior as she stood in the truck’s blind spot.

This is an area heavily populated with seniors. There are also a large number of students attending schools in this immediate neighbourhood. Greenwood College School is located at the south-east corner of Davisville and Mount Pleasant, and Hodgson Senior is just a short distance east on Davisville.

A few weeks ago, there was another serious accident just a short block north at Millwood Road and Mount Pleasant involving two late model cars. Fortunately there were no casualties reported. 

Saturday’s fatality should serve as a red flag to those responsible for slowing traffic in this section of Mount Pleasant.

My office is located at the corner of Mount Pleasant and Davisville. It never ceases to amaze me to see how fast traffic travels in this highly populated section of this road.

I have no expertise on how to control traffic, but I do know that there should be at least a set of yellow flashing lights in this section of Mount Pleasant, alerting drivers to slow down. This is a typical case of “another accident waiting to happen.”

Michael Walker is the councillor for this Toronto ward. His website is at http://www.michaelwalker.ca/

If you are concerned you can write to him at councillor_walker@toronto.ca or you can call his office at 416-392-7906.

Wychwood Park Tragedy – What We Can Learn From It

A recent and tragic incident in a respectable Toronto neighbourhood has come to illustrate the importance of selecting the right area, before selecting your new home. I am in no way suggesting that as a home buyer who chooses not to follow these guidelines, you may face such a similar and unfortunate outcome.

What I am suggesting is that before making any kind of decision on the type of home you would like to live in, it is wise to first choose the right neighbourhood for you.

By doing so, you can almost guarantee you will have an amenable and peaceful time living among your new neighbours.

What makes a right neighbourhood? In two words; people and their values. The comments I sometimes hear from older residents in areas such as Davisville Village or Leaside are that these “new people are not very friendly, do not acknowledge their neighbours, and are just concerned about themselves and their lives.”

According to some of these older residents, conflict arises when the “new comers” to the area either do not share or chose to ignore the values of those who lived in the neighbourhood before them. Homeownership is a highly emotional and territorial issue for some people, and such comments are a vivid example.

The Wychwood Park tragedy was a result of a clash of values by those who have lived there for years and new owners unaware of the unwritten rules of conduct.

Keep in mind that you will always be able to make modifications to your house to suit your needs and lifestyle. However, if after the fact, you realize you bought in the wrong neighbourhood, the solution could be very costly and painful.

On average, a first time home buyer remains in their first home for about seven years. With this in mind… seven years can go by very slowly if you are not happy with your neighbours or the amenities available in the area.

New Low-Rise Condominium Going Up in Lawrence Park

Cresford Developments has announced the construction of Stratford Residences, a new low-rise building on Bayview Avenue, at the site of former Salvation Army College, just south of Lawrence Avenue. The project will accommodate units ranging from 1,550 to 4,275 square feet. A mid-rise building with only seven suites and 17 detached homes will be released in the next few months.

J.F. Brennan Design/Build Inc and Gluckstein Design, two well-known companies, were selected to provide the new community with a classic Georgian-style appearance intended to blend with homes in the Lawrence Park neighbourhood.

One of the most attractive features of this new development is that residents will be able to enjoy the outdoors from balconies, patios and gardens with barbecue hook-ups.

“We’ve attracted some buyers from the other neighbouring buildings because they didn’t have the outdoor space that they were looking for,” said Ms. Athanasoulis, Cresford vice-president of sales and marketing. “You can’t barbecue at some of the other buildings.”

Amenities will include a gym, pool and party room with a fireplace, bar and kitchen. Residents will be able to avail of a guest suite, 18-hour valet service and 24-hour concierge. The developer says courtyard gardens will also be created on the grounds.

The area’s main attractions include the Granite Club, Sunnybrook Health Sciences Centre and York University’s Glendon Campus. Residents will have easy access to the many restaurants, gourmet stores, and antique stores on Bayview Avenue.

Occupancy is slated for fall, 2010.

Real Estate Humour

These are quotes from actual letters sent by tenants to their landlord.

• “I am writing on behalf of my sink, which is falling away from the wall.”

• “In accordance with your instructions, I have given birth to twins in the  enclosed envelope.”

• “This is to let you know that there is a smell coming from the man next door.”

• “The toilet seat is cracked. Where do I stand?”

• “I request your permission to remove my drawers in the kitchen.”