We sold a house during the shutdown. Here’s how it went.

This winter we were advising clients who really wanted to sell their Lawrence Park home in the spring. They had bought a new home outside the city and were counting on moving their family during the summer, between the school terms. Our original plan had been to bring the listing out in May, which is statistically the height of the usual Toronto spring market. But as we got to the end of February, storm clouds were beginning to gather… so the clients’ questions started coming quickly. Do we stick to the plan? Or move to get the listing on immediately? Or simply wait it out and see what happens?

Preparing the house

Part of the challenge was that the clients needed several weeks to get their house prepped for sale. Boxing up contents, cleaning up the yard when winter was still hanging on, getting painters in to freshen up all the rooms. And then the further work of staging, photography and videography, floor plans, and home inspection. Without doing all these steps, their house would not look its best, and would have sold for less.

Together with the clients, we made a joint decision to list at the earliest possible moment. Everyone flew into high gear, and at the end of the third week of March the house was ready for prime time. Of course, by this point the social distancing rules and business shutdowns had been implemented. Buyers and their agents would have to sign disclaimers, and wear masks and gloves. We were going to put on a listing, but would anyone come?

The selling process

What we saw was that the real estate market had suddenly shifted from fast forward to slow motion. We learned to measure time in weeks instead of hours or days. Even with a stunning video on MLS and Realtor.ca, and sending hundreds of emails to likely agents, it took almost a month for the right buyers to connect the dots and make the big decision. In the end there were multiple offers, by the coincidence of different buyers getting to the same point at the same time. The result? We made two families very happy and thrilled to be getting on with their lives – which might otherwise have been put on hold.

A friend asked us how selling a house was different during the pandemic. One thing that really became evident was the importance of personal contact. Not the face-to-face kind, but personal conversations with other agents – emailing, texting and even talking together on the phone! Each one of our showings required a form of negotiation, to make sure the buyer clients were up to speed, not just on the health protocols, but also on the features and details of what they were going to see. So we spent hours talking with agents, prepping for each showing. On the flip side, we had all our information and media prepared, so that the buyers had reviewed the photos, virtual tour, home inspection, floor plans, etc., before the actual visit. Without all this painstaking work, a positive outcome would have been very unlikely.

How is the market today?

At Sage, we get a weekly update on real estate traffic in Toronto. Tracking the nuts and bolts – how many showings booked each day, how many offers registered, how many new listings are going on the MLS (or exclusive). This information has allowed us to track not only the effect of the Covid shutdown on real estate market, but also the day-by-day changes in consumer activity. Where do things stand today? After a dramatic transition in late March (down to about 15% of regular activity), activity has been creeping up slowly, week by week. As expected, price levels have pretty much held firm. Bidding wars have been more sedate than usual, due to fewer participants, but there is a strong, pent-up demand for housing. Even during the shutdown, thousands of buyers were scouring the online listings to see if the perfect home might be out there.

Toronto’s economic growth has historically been based on two foundations: employment and immigration. In the 21^st century, Toronto has quietly become one of the world’s great cities. People want to live here, to work in the tech sector, and in all the knowledge industries. Immigration may be paused, but it will resume soon enough. And as the construction industry well knows, there is already a pressing need for more housing in the Toronto area. All these factors point to a strong real estate market. As more listings come out, buyers will be ready for them.

Want to talk about your house?

As experienced baby-boomer agents, we’ll provide honest advice on when and how to list your house. We’ll provide the latest data, and discuss the best strategies with you. We relish challenges, we like to share, and we’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

Reality check, halfway through 2017

York, Toronto and Peel lead the GTA

We’ve been focusing for a few years on the remarkable price increases of homes in the 905. The reasons were clear: buyers were finding a greater supply of low-rise homes, within commuting distance and at lower prices. In general, the percentage price increases have been greater outside the City of Toronto. It makes perfect sense, since buyers can get more house for their money, when they travel further afield.

The chart above shows weekly average price movements during the first half of 2017. York Region kept its top position in this chart, and at the midpoint of 2017 the York prices are up almost 14% over the past six months. Toronto and Peel region have shown similar gains over this period. Meanwhile, average prices in Halton and Durham regions (which peaked dramatically during the spring) are now back at their January levels.

Beyond the GTA

Cities like Hamilton, Guelph, and Barrie have been getting more attention this year, from Toronto millennials looking for affordable urban settings. As agents, we’ve gotten used to checking the GO schedules along the various train corridors, and the EQAO scores for schools in far-flung school districts, as part of our daily routines. It’s increasingly clear that the Toronto megacity is evolving into a regional cluster of communities.

Babies, babies

Demographics tells the key story here. Millennials were called the “Baby-Boom Echo” generation. Economists were fascinated as this group delayed car purchases, household formations, and home buying plans. It’s becoming clear that this generation is finally asserting its priorities. Millennials may not do things like their predecessors, but they will figure out how to manage housing, transportation, and kids – in their own ways.

Advice from baby boomers?

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller. As experienced baby-boomer agents, we’re pretty smart about this stuff.

We relish challenges, we like to share, and we’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

“Buy the house, not the price”

Reverting to the norm?

The average prices for May 2017 are in, and the results are getting a lot of attention. Buyers seem to be lining up into two camps – the “wait-and-see” school, and the “fortune-favours-the-bold” group. Sellers, meanwhile, are understandably confused.

Is it still a sellers’ market?

Yes. There are many more buyers than sellers, and homes are selling quickly, usually over asking. The average selling price of all GTA homes was $863,910 in May, about 15% up over last May. In many neighbourhoods, detached and semi-detached homes were getting sale prices between 25% and 30% higher than last spring.

Sellers are not all of the same mind. Some genuinely need to sell at this time, while others will have been attracted by the notion of cashing out. This diversity of motives can be confusing. Asking prices are also all over the map. On any given street, one house can be priced drastically under its likely selling price; while another comparable house can come out the same week priced hundreds of thousands of dollars higher. Buyers (and their agents) then have to unravel the conflicting narratives and determine where the likely values are.

Should I buy or should I wait?

This question never gets old. If you have a good reason to buy, and you have a budget set, then yes, buy. Don’t buy just any old thing that comes up in your price range, but buy the home that makes sense for you. If the only homes you want are priced out of your range, then do some soul-searching. Can you alter your criteria? Will your purchasing power increase significantly, or will your needs change in a few years?

If you’re buying a property to live in, think long and hard about how well a home can serve your needs for at least three to five years. “Buy the home and not the price.” It’s not all about price in this market. A qualified home buyer can have choices, and (especially if you’re a first-time buyer) you may need to talk with an experienced Realtor to fully evaluate your options.

If you’re buying a property primarily as an investment, then your criteria will be drastically different and you will be seeking financial and tax advice.

Expert advice – at your fingertips

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller.

We relish challenges, we like to share, and we’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

Keeping a cool head

If you thought 2016 was a roller-coaster year, 2017 is shaping up to be more of the same. Given the already high prices in Toronto, it’s natural that the lower prices in surrounding communities have drawn off a lot of the traffic, and news reports have now caught up to the boom in 905 and the other parts of southern Ontario.

Our chart (above) shows that the first two months’ of sale prices have already eclipsed the peak moments of 2016. Our dotted-line “projection” suddenly looks highly unlikely. If there are any winners, it may be the older home owners on fixed incomes who now have a chance to make a windfall gain.

For buyers today, the main thing is to keep a cool head and do some serious thinking about what really matters. For many millennials, the imperatives of starting a family are becoming a top priority. Where can they find space to live, commute, and bring up children?

If you’re a buyer, you need to be prepared. With your mortgage pre-approval and a strong understanding of the market, you’ll be able to make smart decisions. You may not win on your first time bidding, but the best-prepared buyers have a strong edge in this market.

If you’re a potential seller, things look easier. But you still need a real estate agent who puts your needs first, ahead of just making an easy sale.

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller. We’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

The surprising fall market

In real estate, the fall market is often seen as the poor cousin to the spring. In reality, it’s an important part of prime time, about 16 busy weeks of buying and selling.

Some Toronto home prices have already reached new highs in September and October, surpassing the marks set in April or May. For most practical purposes, we can assume that typical prices (and levels of competition) are about the same now as they have been throughout 2016.

Tighter lending criteria came into effect on October 17th, forcing some purchasers to rethink their options. But in Toronto and the 905 area, the large number of qualified home buyers easily outnumbers the supply of homes coming onto the market.

It’s hard to call this a “shortage” of listings. What’s happening is that while more properties are being listed, they are getting snapped up in record numbers. The result is that there is very little available selection at any point in time.

If you’re a buyer, you need a coherent strategy. Working with your agent, you need to build a real-time model of the actual market activity in your chosen area. You need to know the sold prices, the numbers of offers being presented, how high the bidding is likely to go. With your mortgage pre-approval and a strong understanding of the market, you’ll be able to make a smart offer on a property that meets your own criteria. You may not win on your first time bidding, but the best-prepared buyers have a strong edge in this market.

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller. We’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

What’s driving the demand?

Each new year tends to mark a fresh beginning in real estate, but 2016 is clearly something special. Take a look at the chart above, and you’ll see how the gap in year-over-year prices started widening in March and April, 2015. Since then, double-digit increases have been reported in various categories of the market, both in the 416 and 905 areas.

Which kinds are going up the most?

By 2015, price increases outside the City of Toronto started to be steeper than those within the city. And as of the first half of this month, it’s clear that the greatest percentage increases are in the most affordable categories. In the 416, the average townhouse is 22% up over this time last year. In 905, semi-detached homes are up 15%, and detached homes are up 19%. These are all categories where first-time buyers can hope to purchase a home on the ground, in the broad range of $500,000 to $800,000.

Condo apartments are somewhat different. The mix is changing to include more new units, often smaller than the older ones. Even so, lower prices are drawing more buyers to condos in parts of the 905, with the result that average apartment prices are now rising four times faster in the suburbs, compared to the 416.

In this context, the price increases for detached homes would appear to be levelling off. There are parts of the city, however, which are experiencing the most explosive price increases ever in 2016. Inner suburbs like Don Mills, with bungalows built on large lots in the 50s and 60s, are seeing price increases of over 20% this year. Meanwhile, a shortage of resale homes in the core neighbourhoods of the old city has guaranteed bidding wars on just about any listing.

You need a plan

Whether you’re in the market for a house or a condo, you need a smart team to plan and execute a winning strategy. We’re available to talk… If you’re ready to start a conversation you can email us, or ask for James and Joanne at 416-483-8000.

New down-payment rules

The new down-payment requirements will affect thousands of home buyers in Toronto and the GTA.

The new rules affect all home purchases where the down payment is less than 20%, and the sale price is between $500,000 and $1,000,000. Purchases up to $500,000, or over $1 million, will not be affected. The changes take effect on February 15, 2016.

Specifically, a buyer will need to provide a minimum down payment of 5% on the first $500,000 of value, PLUS a minimum 10% down payment on the remainder of the price, up to $1 million. (Buyers of properties over $1 million are already required to provide a 20% down payment.)

As an example, a house purchase of $700,000 will require a minimum down payment of $45,000 (up from $35,000 currently.)

A big deal for houses (condos not so much)

The new rule will have the strongest impact on buyers of low-rise homes. 53% of all low-rise home sales across the GTA would have been in the affected category in 2015. First-time buyers looking for a house in the City of Toronto know how few actually sell below $500,000. Condo buyers will probably not be affected, since only 13% of condo apartments are selling in the affected price range.

Family help

This holiday season, first-time buyers who’ve been saving up for a 5% down payment may want to have “the talk” with family members… Is it okay to stay off the property ladder until you can save up more, or is there a justified case for a little family gifting, to speed up the process?

Contact us if you’d like to get objective advice from a mortgage professional… we can connect you with some excellent people!

There’s lots more to know…

If you’re in the market for a house or condo, there’s lots you should know. We’re available to talk… If you’re ready to start your home-buying campaign you can email us, or ask for James and Joanne at 416-483-8000.

 

Where the homes are

Our real estate board just published a report that outlines a dramatic shift in GTA housing patterns. Here are some of the highlights:

Fewer houses, more condos

Back in October 2005, there were a total of 28,852 low-rise homes available for sale in the GTA. This October, there were just 14,994 low-rise homes for sale. (These figures combine resales on MLS, along with inventory from new-home builders.)

Over the same time period, the total number of condo apartments for sale grew from approximately 16,000 a decade ago, to around 27,000 today. (These figures are approximate because some condos under construction are duplicated in the MLS listings.)

Adding the figures up, there were around 45,000 new and resale homes on the market in 2005, and a similar, probably smaller number this October. Meanwhile, the GTA population has risen, from around 5.5 million in 2005, to around 6.5 million today.

It’s clear that builders have shifted their resources: this October, only 19% of the new-construction inventory was in low-rise homes. Ten years before, new low-rise homes were almost half of the total that builders had available.

Condos are the affordable (but shrinking) option

Another striking detail from the study: the average price of a builder’s new low-rise home in October 2005 was $387,369. The average price of a new-construction high-rise apartment today is $440,382. (The price for a new low-rise is of course much higher, at $802,376.) And just as packages of ice cream, coffee and detergent have gotten smaller, so have condos:  The average new high-rise unit in October 2015 was 767 square feet, compared to 908 square feet in 2005.

Condos appreciate less (usually)

Over the past decade, we’ve observed that prices of resale low-rise homes have risen at about twice the rate of high-rise condo prices. This trend will likely continue (bidding wars, so common for low-rise homes, happen far less often with condos.)

One exception: in the past two years we’ve seen prices in older condo buildings increasing sharply, when nearby new construction has prompted a re-evaluation of the older buildings, which often have good space and amenities. This could become a counter-trend.

There’s lots more…

If you’re in the market for a house or condo, there’s lots you should know. We’re available to talk… If you’re ready to start your home-buying campaign, let’s have a conversation! You can email us, or ask for James and Joanne at 416-483-8000.

Snapshot of the Fall Market

Toronto’s fall housing market started right after Labour Day. By early October, the weekly price averages were on a par with those from last May and June.

It looks like a record number of properties are changing hands this year… and yet we still see many areas where there is a “shortage of product.” This housing market is driven by growing demand from buyers.

How much are prices rising, and where?

In September, the number of detached homes sold was virtually unchanged from last year, and sale prices for those rose about 11%. The number of resale condos that sold was up over 5%, and prices for those still went up, more than 5% over last year. Prices for all types of housing rose just as sharply in the 905 areas, as they did in the City of Toronto.

Strategies for buyers

Buyers need to have a game plan. Unless you have an unlimited budget, you’ll need a strategy to get the best possible property that your financing will allow. You need a team on your side, including smart agents who can help you create and carry out your campaign!

That’s where we come in… If you’re ready to start your home-buying campaign, let’s have a conversation! You can email us, or ask for James and Joanne at 416-483-8000.

September takes off

Two weeks after Labour Day, and the Toronto market has been its typical, irrepressible self! Average prices are up as predicted, and home buyers are out in full force.

The chart tells a simple story. Across the GTA, house buyers are competing for properties. Overall, about half of the houses reported sold in the last seven days went over asking. In the central core neighbourhoods, our sample showed a remarkable 71% of sales where the buyers paid over the asking price.

Bidding wars spread

Toronto’s inner suburbs have been experiencing strong price growth for several years, and increased interest from multiple buyers. And most of the 905 area has felt an increase of “downtown-style” bidding wars this year. Figures from Vaughan and Richmond Hill above show that 48% of houses sold last week went over asking.

Based on comments from many agents, both at Sage and other brokerages, there were anywhere from three to ten bids on a large number of houses this month. Even some condos were receiving multiple offers. Meanwhile, a few listings were ignored by buyers, including well-priced houses where buyers may have simply assumed that the final price would be too high.

The right time to sell
There will continue to be a shortage of listings this fall. Do you know someone who may be ready to sell their home? Do them a favour and put us in touch. With our expert marketing, that home will get sold quickly and for the highest price! You can email us, or call James and Joanne at 416-483-8000.

GTA Market Update – Sept. 12, 2015

Watch the dotted line
No, this is not an optical trick! Each month, as we update this chart, our first instinct is to look at the latest price point (the black line). While this is useful to know, our dotted line (in gray)  actually packs a lot of data…

We call it “projected.” The dotted line is actually made up of two components – the shape, and the placement. The shape comes from a calculation of month-to-month changes in the Toronto market, going back about 20 years. The placement is more art than science: In January, we position our dotted line to represent approximately what an average yearly increase would represent for the coming year. Historically, this works out to around 6% for the GTA.

Seasonal behaviour is real
We like the dotted line because it represents a confirmed behaviour: home prices really do fluctuate during the twelve-month period, in a predictable way. At the same time, each calendar year is a bit different, and the dotted line helps us to spot those trends.

This year’s trend sticks out a mile! In early 2015, the average home price in Toronto and the 905 area shot up by $100,000. In August it was down again, by around $50,000. By October, the dotted line is saying, that number could be up another $30,000. The black line suggests that could be the full $50,000 again. We’ll know soon enough.

The right time to sell
There will be a shortage of listings this fall. Do you know someone who may be ready to sell their home this year? We’d like to hear from you. With our expert marketing, that home will get sold quickly and for the highest price! You can email us, or call James and Joanne at 416-483-8000.

GTA Market Update – July 8, 2015

Two things that stand out…
There are two interesting facts buried in the latest Toronto home sale figures: First, the majority of houses in these figures are outside the City of Toronto. Second, the price increases throughout the 905 region are actually steeper than those in the City.

Price increases highest in York Region
Our real estate board’s composite price index for the City of Toronto is up 6.58% (year over year) for June 2015.  Peel Region is up 8.62% and Halton Region is up 8.99%. Higher still, Durham Region is up 12.35%, and York Region is up 12.83%. Even when you isolate the figures for detached houses only, the price increase for the City is still lower than those for the surrounding regions.

Most houses are in the suburbs
About two thirds of the low-rise family homes sold in the GTA this year are in the 905 area. This proportion is reversed for high-rise condos: about two thirds of the apartments sold are in the City of Toronto (but the proportion of condos in the 905 has been increasing.)

Demand is regional
These statistics show that the demand for housing is not limited to the trendy downtown areas; it affects the entire GTA. Reports from cities including Hamilton and Kitchener-Waterloo suggest that increased demand for housing is being felt in those centres also.

Toronto is a global city
Thanks primarily to immigration, Toronto and the GTA are known in every part of the world. Our quality of life is a magnet that will underpin the region’s growth for years to come.

Every home is unique
The value of your home is intensely local. A small semi on a downtown street may well be worth as much as a five-bedroom detached with a pool further out in the GTA. Houses on one block are often worth more than the ones on the next street over, because of real or perceived differences in location or style. Buyers make decisions based on their needs and wishes.

The right time to sell
The numbers point to a continuing sellers’ market. Do you know someone who may be ready to sell their home this year? We’d like to hear from you. With our expert marketing, that home will get sold quickly and for the highest price! You can email us, or call James and Joanne at 416-483-8000.