We’re almost certain we could copy and paste the following lines in each ‘market update’ from the past few months…
“Sale volume is higher along with prices. Market is ‘crazy-hot’ for low-rise homes and ‘hot’ for most condos. Get ready for bidding wars, bully offers and properties selling extremely quickly.”
In the past 30 days, it seems as though properties are selling even faster and more feverishly than before. Never have we received the number of calls about pre-emptive ‘bully offers’ on homes like we have in the past month. Additionally, there seems to be a sentiment among some buyers (and perhaps their Realtors) that no other home will ever come available, resulting in sale prices that exceed rational logic.
This is excellent news if you’re a Seller. Unfortunate news if you’re a buyer or if you’re looking to sell and buy in the same market. This insatiable demand for low-rise homes is resulting in frustration amongst buyers who have fairly ‘reasonable’ budgets of $650,000 – $900,000 to buy a home. We’re not implying that a detached or semi-detached home cannot be purchased in this price range but in central Toronto neighbourhoods, it can be a competitive market to be shopping. The prospect of buying a home for this price in Trinity-Bellwoods is almost non-existent unless you want a tear-down or complete gut-job. In Riverdale or Leslieville, this price range will get you a decent 2 bedroom (or small 3 bedroom) semi-detached home that you’ll likely be bidding on with 6-10 other buyers. You may have more luck in Little India or further East along the Danforth. Don’t even think about Yorkville or the Annex. That price range won’t get you anything you’ll really want to call ‘home’ without a massive reno.
We’re making blanket statements and we’re sure there will be people who will inform us of a property they were able to purchase in those neighbourhoods within that price range. We’re not saying that it is 100% impossible to buy a house in that price range in those neighbourhoods but we are saying the prospects are becoming increasingly bleak. Additionally, with each new sale at precedent setting levels, more and more buyers are being pushed out of the market. This erosion in affordability of the low-rise market is pulling people back to the condo market (high-rise). The prospect of buying of larger condo (two or three bedroom) is becoming a reality and keeping the condo market extremely buoyant. A quick ‘shout-out’ to all the nay-sayers about the impending 40% correction in the condo market. We don’t disagree with you that there are pockets of the city with overvalued condos that are ripe for a correction but with the number of sales outpacing the number of new listings, increasing commuting times to the ‘burbs and a shift towards raising a family closer to work to enjoy the precious few hours of downtime you have every night, we don’t see this ‘correction’ in the condo market anytime soon.
YTD figures for the ‘central Toronto neighbourhoods’ that we monitor…
Detached homes – $1,043,000
Semi-Detached homes – $800,922
Attached/Rowhouses – $749,690
Condo Townhouses – $511,809
Condos – $437,348
Looking forward to the next month of activity and another update in early May, 2015!