How’s the Market?

Summer always provides a bit of a pause to the market. This lack of continuity can make it difficult to predict what the fall market will bring and this year it’s especially difficult because of the uncertainty that’s been present in the residential real estate market in central Toronto since about April. But I’m always up for a challenge so here’s what I think you can expect to see if you’re buying or selling in the near future:

Yes, prices have declined since their peak in March. And yes, there are fewer bidding wars than there were before. But there are still plenty of buyers out there and the number of homes for sale is always limited. Is every buyer desperate to buy and willing to pay whatever price is necessary to do so? No. Is every seller guaranteed of selling within a week with multiple offers for well above list price? No. In my opinion, the market is now stable and while prices aren’t as high as they were in March and the market isn’t as crazy as it was in March, price levels are still very healthy and are probably around where they were last year at this time. 

Here’s how I look at things:

There are plenty of buyers looking for homes, but not all buyers are the same. Let’s say there are three classes of buyers: A, B and C Buyers.

  • A Buyers: These buyers are highly motivated to buy right away and are willing to pay a good price for the right home.
  • B Buyers: These buyers are ready to buy, but they’re a little fussier and will only buy when they see the right home at the right price.
  • C Buyers: These buyers are waiting for the right opportunity. If the perfect home comes along at an amazing price they just can’t pass up, maybe they’ll make an offer.

As is always the case, there are also people hoping to sell their homes. These homes can be divided into three classes, too: A, B and C Homes.

  • A Homes: These are very good homes with no major drawbacks that are well priced and have wide appeal to buyers.
  • B Homes: These homes are good and are well priced, but they may have one or more drawbacks which give buyers pause.
  • C Homes: These homes either have significant drawbacks which cause most buyers to rule them out right away (they’re on a major street, they back onto a shopping plaza, etc.) and/or they’re over priced.

Now here’s how the market works: When A Buyers see an A Home, chances are that home will receive multiple offers and sell quickly for a very good price. If an A Buyer falls in love with a B or C Home, chances are the price will still be pretty good, but not great because there likely won’t be a bidding war. When a B Buyer sees a B Home, s/he will be willing to pay a fair price. If a C Buyer sees a C Home, they’ll only buy it if they can get it for a really low price. There are other combinations and outcomes, too, but I’m writing a blog post and not a book here.

Typically, price and the time it takes to sell will vary depending on the type of buyer and type of home involved. We could also take into account the different types of sellers, but given the limited supply of homes and ample demand from buyers, the motivation of sellers usually doesn’t play as prominent a role as buyer type and home type in the ultimate price paid so we’re putting seller types aside for the moment.

So what should you do if you’re getting into the market? If you’re a seller, determine what type of home you have, price it accordingly and set realistic expectations. If you’re a buyer, determine what type of buyer you are, match it up to the type of home you’re looking at and figure out how much competition there’ll be so you’ll know how quickly you’ll need to act and how much you’ll have to pay.

Supply will continue to be limited. Perhaps even more limited than before as sellers who don’t have to sell may wait to see if the market goes up again. Some homes will sell quickly for good prices, some will take a reasonable period of time to sell for a reasonable price and some will sell for relatively low prices. (Remember, everything is relative. A low price today would have been an astronomically high price 3 years ago.) Understand how the market works and what your goals are if you want to give yourself the best chance of achieving the best result. It’s a difficult market to navigate now, so be cautious.

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

Central Toronto – Market Overview

  Average Price % of List # of Sales Total Listings # of New Listings Average Days on Market
Aug ’16 $737,422 101% 1,743 2,431 2,243 23
Sep ’16 $868,380 103% 1,747 2,584 2,795 21
Oct ’16 $857,596 103% 1,853 2,385 2,551 19
Nov ’16 $901,035 102% 1,740 1,874 1,986 19
Dec ’16 $790,734 101% 1,082 1,085 846 22
Jan ’17 $811,972 103% 963 1,235 1,533 21
Feb ’17 $986,604 107% 1,489 1,260 1,851 15
Mar ’17 $1,003,774 110% 2,166 1,507 2,951 11
Apr ’17 $1,080,388 110% 2,099 2,201 3,506 10
May ’17 $1,022,740 105% 1,958 2,889 4,037 12
Jun ’17 $926,177 100% 1,562 2,878 2,932 15
Jul ’17 $820,906 98% 1,144 2,718 2,153 20
Aug ’17 $798,797 99% 1,257 2,263 1,740 24

 

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.

Type of Home  No. of Sales Price Range  Ave. Price Date
  • 2 Bedroom
  • Bungalow
  • Mutual driveway
1 $1,318,000 $1,318,000 Apr ’17 – Aug ’17
  • 3 Bedroom
  • Semi-detached
  • No family room
14 $975,000 – $1,506,000 $1,269,750 Apr ’17 – Aug ’17
  • 3 Bedroom
  • 2 Storey Detached
  • No family room
8 $1,210,000 – $1,710,000 $1,520,500 Apr ’17 – Aug ’17
  • 3 Bedroom
  • 2 Storey Detached
  • Family Room
4 $1,653,000 – $1,917,000 $1,762,500 Apr ’17 – Aug ’17
  • Newer Construction
14 $1,975,000 – $2,880,000 $2,444,750 Apr ’17 – Aug ’17

 

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.

House Type John Ross Robertson  Lytton Park  Lawrence Park  Cricket Club 
  • 30 foot lot
  • 2 storey
  • 3 bedrooms
  • Private Drive
$2,000,000 – $2,500,000 Not found in this area  Not found in this area  $1,800,000 – $2,200,000
  • 30 or 40 foot lots
  • 4 bedrooms
  • Private Drive
 $2,200,000 – $3,200,000  Not found in this area  Not found in this area  $2,000,000 – $2,600,000
  • 50 foot lot
  • 4+ bedrooms
  • Private Drive
  • Solid Condition
  • Not Renovated
  • No family room
 $3,000,000 – $3,500,000   $2,600,000 – $3,000,000  $2,800,000 – $3,500,000 $2,400,000 – $2,800,000
  • 50 foot lot
  • 4+ bedrooms
  • Private Drive
  • Renovated
  • Family Room
 $3,500,000+   $3,000,000+   $3,500,000+  $3,000,000+
  • 50 foot lot
  • Land Value
 $3,000,000 – $3,500,000   $2,600,000 – $3,000,000 $2,800,000 – $3,500,000    $2,400,000 – $2,800,000

 

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