Real Estate Agent in East York - Better Homes And Gardens Real Estate

Toronto Condo Madness: March 2017

10 March 2017
Kevin Hartley

As some of you prepare to head away on a March break, I wanted to give you a summary of the market so that you can chit-chat by the pool or on the beach with savvy about our crazy Toronto real estate!

The real news and the core of this update is about condos!

I’ll quickly say that the freehold market is still crazy. The pattern of seeing those homes which come onto the market selling quickly and in multiple offers still holds true. And, as the media reports, demand and the lack of inventory is driving prices sky high over the same time last year. By how much? Well, media reports averages anywhere from 5% to 26%. That said, there are some variations by location across the GTA. If you’re interested to know about your specific home or neighbourhood, let me know and I’m happy to report back or do a market evaluation of your home.

But let’s talk about condos! 

In short, the condo market is now behaving as the freehold market has been for many years.

 

The condo drama continues...

  • Massive Activity: In a listing experience of my own this February, I had the privilege of representing a gorgeous, 1000+ sq ft condo in City-Place. With 121 showings in a week, multiple TeamPK agents on site to help me handle the viewing traffic, and 14 registered offers, we achieved a new high sale for the building (given the sq ft area) at 21% over list (and we were listed very fairly, compared to comps). Unexpected and astonishing, all at the same time!

  • Dramatic Over List Sale Prices:  On the listing and the buying side, we continue to grapple with comparable sales supporting reasonable list prices, but not supporting final sales that are sales 20%, 30%, 40% over asking. 

  • Astonishing Numbers: 47% over list is the highest lift I’ve seen (reasonably priced, to begin with) for a lovely, centrally located (Spadina & Bloor) main floor unit in a converted Victorian manse, with bedrooms below grade. 

  • Vanishing Act:  Condos are selling while I’m standing in them with clients before we can even submit an offer. 

  • Multiple Offers A New Norm for Condos: On offer night in February I was surprised to have 14 offers; I’m now regularly hearing of 25 or more offers being registered. Where even last summer holding off for (multiple) offers on a condo was rare. It is now the new norm and that’s if you make it to offer night without an aggressive permeative offer (a “bully offer”) coming in to steal the show...and the condo!

  • Unpredictable End Game: A year ago and through last summer condos sold, with only moderate variation, at 96%-99% of their list price. On the rare occasion when a condo sold over list price, it was generally in the 103%-108% of the list price, with rare exceptions. That reasonable predictability has totally vanished. It's challenging to calculate with reason the selling prices we're seeing. 

  • Pre-Built Profits:  Pre-build purchases, and condo assignments (selling your pre-build purchase contract and remaining obligations before the condo is even built or ready for occupancy) are generating active buyer interest and creating great investment returns. 

These recent sale numbers, the market behaviour, is all factual. As this madness becomes the "new norm", predictability, theoretically, should return.

For now, buyers are making these high priced offers. Owners are accepting them. Mortgage brokers are approving them and the few mortgage brokers I’ve spoken to assure me that while buyers are qualified, they are seeing more first-time buyers coming with “gift letters”, affirming that “mum & dad” or other third parties are helping them out.

The factors driving prices are many. The shortage of ready for occupancy units is expected to last into 2019; there is continued foreign and national immigration to our great city, and potentially increased foreign investment in our city driving both condo and freehold home prices.

While not all of you are looking for the same condo unit in the same geographic areas, I have put together a broad snapshot below which reflects the “new reality" of the market in general, and pretty closely mirrors what we’re seeing in the searches for those of you still looking.

800-899 sq ft 2BR, with parking & locker

AVG SALE: $663k FEES: $547/mth TAXES: $3126

800-899 sq ft 2BR+, with parking & locker

AVG SALE: $668 FEES: $561/mth  TAXES: $3135

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900-999 sq ft 2BR, with parking & locker

AVG SALE: $684k FEES: $622/mth  TAXES: $3100

900-999 sq ft 2BR+, with parking & locker

AVG SALE: $670K FEES: $671/mth  TAXES: $3225

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900-1199 sq ft 2BR, with parking & locker

AVG SALE: $767k FEES: $738/mth  TAXES: $3662

900-1199 sq ft 2BR+, with parking & locker

AVG SALE: $771K FEES: $767/mth  TAXES: $3834

All numbers reflect TREB MLS sales in the search area from Keele to the DVP, St. Clair down to the Lake. Tax variations due to location, not only size. All sales Since Jan 1, 2017.

As always, I’m here to help and answer your specific market questions.

If you’re already away or headed to a beach, enjoy! I’m officially jealous…lol, please fan some warm air northwards!

Thanks for reading. Questions or ideas for a future blog? Feel free to contact me here.

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Kevin Hartley, Broker is a Toronto based real estate Broker with Better Homes & Gardens Real Estate | Signature Service, Brokerage. @Home is his lifestyle blog, an expression of his passion for home keeping though MAKING (Recipes), DOING (DIY), BEING (Health/Wellness) and DWELLING (Home Ownership, Sales & Maintenance).  Content not intended to solicit clients under contract.

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