Hi,

Well, it’s official. We’ve arrived safe and sound at our destination, Sage Real Estate. Now it’s business as usual and time for a market update.

The market hasn’t changed much since my update last month, but it might be different from what you’re hearing so I think it’s worth a short recap. 

Those headlines decreeing the market is tanking, in a free fall or crashing? I don’t see a basis for such statements about the market for homes in Toronto. It’s true prices are lower than they were several years ago, but maybe by about 5%. In my mind, that’s almost not worth mentioning, although it IS a far cry from the usual price increases we’ve grown used to seeing. Perhaps that’s why some people consider the market to be in dire straits. Or they’re thinking of some aspects of the condo market where prices have decreased by larger amounts. But even then I think you’d be hard pressed to use those terms to accurately describe the market.

There’s a lot of uncertainty in the market right now, just like there is everywhere in the world. People tend to act more cautiously and put off big decisions. Many buyers are waiting on the sidelines to see if prices fall further. Those that are looking aren’t jumping to buy. They’re taking their time. They’re offering lower prices, hoping to find a desperate seller. A few will get a good deal. Most will pay fair market value. Many sellers are waiting for prices to go back up before listing their homes. Those that are selling aren’t often desperate. They’re asking realistic prices and are willing to negotiate. A few will get premium prices. Gone are the days when every home was listed artificially low and received multiple offers on offer night. That strategy is rarely used these days and, when it is used, it’s often unsuccessful. As a consequence of all this, homes are taking longer to sell. The market is more balanced. It’s not a bad thing. 

So is it a good time to buy? I think so. But only if it’s the right time in your life. Is it a good time to sell? I think so, but again, only if the timing works for you. There are two crucial things to keep in mind if you’re thinking of buying or selling in this market: pricing and choosing the right Realtor.

Pricing homes accurately has never been an easy task. It’s part science, looking at the comparable sales, and part art, relying on my experience and gut feel to gauge the emotional pull a home will have on potential buyers. I spend a lot of time thinking about the list price that will help my clients achieve the highest possible sale price. Getting the price right is usually the most important factor when it comes to selling a home. 

It’s easier to do that in a very hot market when a low list price will generate a bidding war. It’s much more difficult to do in a market like this. Especially when you see the things I’ve been seeing lately. Within the past month or so, two very similar bungalows sold near Yonge & Lawrence. Only a couple blocks apart, one sold for $200k more than the other. About eight months ago, a two storey detached home near Yonge & Lawrence sold for $100k more than a very similar home only about a block away.   

I asked myself how these things could happen. It’s one thing to pay twenty cents more for a pound of apples at one store than another, but we’re talking about hundreds of thousands of dollars here. My first inclination was to say it was a matter of motivation. The sellers might’ve been much more motivated to sell and willing to accept lower prices. Or the buyers might’ve been much more motivated to buy and willing to pay higher prices. But then I had my epiphany. My answer to the question: How to explain the difference a good Realtor can make? 

I’ve heard many people over the years tell me “Any Realtor can sell a house. All you have to do is stick a sign in the lawn and wait for a buyer.” I don’t disagree. Any Realtor CAN sell a house. And I don’t think a good Realtor will get you $5m compared to the $2m another Realtor would get you. But there will be a difference and it can be significant. Do you want to get $100k or $200k less than your neighbour for the same house? Or pay $100k or $200k more for the same house your neighbour just bought? Because that’s the spread between the result you’ll get when you work with a good Realtor and the result you’ll get when you work with another Realtor. How much of that spread do you want to put in YOUR pocket? 

A good Realtor is going to help you get as much of that spread as possible. Yes, the parties’ motivation plays a role, but it’s only part of the story. It really comes down to having a Realtor who understands how the market works, has a good grasp of fair market values, is persuasive with other Realtors and able to get a sense for the other side’s motivation. These are all components of strong negotiation skills and that’s where a good Realtor makes a world of difference. 

For years I’ve known my negotiation skills helped my clients end up with tens or hundreds of thousands of dollars more in their pockets than they would’ve if they’d hired another Realtor. Many of my clients knew it, too. One couple wrote “We are absolutely convinced that Michael used his negotiating skills & knowledge of the market to get us an extra $105,000.” If my clients get an offer that’s significantly below fair market value, I tell them they don’t have to accept that offer because there’s a good chance (never a guarantee) they’ll get a better offer in the future. When I speak to the other Realtor, I get a sense of their client’s motivation. Sometimes they come right out and tell me and sometimes I rely on my gut feel developed over the past thirty five years. It helps me get an idea of how high or low they’ll go. Then I use my market knowledge to persuade the other Realtor that the my client’s property is at the top end of the spread (or the bottom end if my clients are buying). I work hard to get them as much of that spread as possible. I don’t stop negotiating until they say they’re happy. It’s all about the spread. Every dollar counts. 

Whew. I just took a quick break to proofread what I’ve written and it sounds a little like an infomercial. Hopefully, I’m preaching to the choir because you already know how I work and don’t need convincing. But I’m going to leave it as is because you may know someone who’s thinking of buying or selling in the near future and they may learn something helpful if you forward this to them.

That’s all the real estate for now. There are signs we might actually get some summer weather this year. The market will probably slow down, as is usual in the summer. But Anthony, Corinne and I will be here, in our new home, if you have any questions. Enjoy the warmer weather.

BTW I’ve tried a couple new bakeries recently that I think are worth checking out:

Lazy Dough at 1775 Avenue Road just south of Melrose (between Lawrence & Wilson). Their chocolate almond croissants have quickly become a family favourite. We also like their apple turnovers, sourdough breads and cinnamon swirls.

Bakerbots Baking at 1242 Bloor St. West between Dufferin and Landsdowne. I tried slices of their carrot cake, which was delicious, and their key lime pie, which reminded me of my favourite key lime pie from Joe’s Stone Crab House in Miami Beach. They also had an excellent looking brownie I wanted to try, but I had already bought a brownie from another bakery that day, along with about six other treats, and even I have my limits.

If you’d like to check out the numbers, take a look at the charts below.

Central Toronto – Market Overview

Prices – John Wanless and Bedford Park Public School Neighbourhoods

There are five typical home styles in the neighbourhood north of Lawrence, east of Avenue Road, west of Mount Pleasant Road and south of Old Orchard Grove and Snowdon Avenue. Each typical home style is shown on the chart below. Please remember that factors such as house size, lot size and dimensions, condition and location, amongst others, affect selling prices.

Prices – John Ross Robertson, Lytton Park, Lawrence Park and Cricket Club Areas

JOHN ROSS ROBERTSON – Chudleigh Ave., Cheritan Ave., Chatsworth Dr., Glenview Ave., Glengrove Ave. W., Glencairn Ave.

LYTTON PARK – east and west of Avenue Road: Alexandra Blvd., Lytton Blvd., Strathallan Blvd., Cortleigh Blvd., Hillhurst Blvd. (almost all of these homes are on 50 foot wide lots)

LAWRENCE PARK – between Yonge St., Bayview Ave., Lawrence Ave. E., and Blythwood Rd. (almost all of these homes are on 50 foot wide lots)

CRICKET CLUB – between Avenue Rd., Yonge St., Wilson Ave., and Brooke Ave.