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Real Estate During COVID-19: Update #2

April 13th, 2020 Posted by Blog No Comment yet

The COVID-19 pandemic has many folks on edge and worried about the economy – and the real estate market, in particular. Here are a few things to consider:

We expect the economy to bounce back
If we can believe what they are saying, China is already starting to recover as COVID-19 gets more controlled. The Chinese government has started it’s own ‘stimulus’ plan, so if they can get some momentum going, that will help the world economy get onto the road to recovery. Add to that the huge stimulus package in the US – plus Canada’s, too – and we’ll see some serious money pumped into the economy, which should generate a strong recovery.

The housing market seems stable

The real estate market is still competitive, and multiple offer scenarios are still happening (although that may peter out as time goes on…). The Toronto Regional Estate Board (TREB) recently reported 8,012 home sales through TRREB’s MLS® System in March, 2020 – up 12.3% compared to 7,132 sales reported in March, 2019. That increase was based mostly on just the first two weeks of the month, meaning that if it wasn’t for COVID-19, this March would have been a really fantastic month for Toronto real estate. (Check out my blog for a more detailed breakdown of the March stats soon.)

With all the stimulus, financial supports, mortgage deferral options, etc., it’s unlikely that Canadians will start dumping houses, which would push prices down (as happened in the U.S. during the Global Financial Crisis). Plus, new home construction has declined a bit in recent years. Some believe that builders have been under-producing new housing stock. With the federal government tightening mortgage regulations at the same time, we can be reasonably confident that today’s homeowners (and buyers) are solid enough to get by. So, there’s not really much risk of either over-supply of housing stock *nor* of homeowners defaulting on mortgages, either of which could push market prices down. Because market fundamentals are generally strong, housing is a safe long-term investment, and should be able to weather this storm.

Furthermore, if this ‘quasi-quarantine’ is short, real estate will probably pick up speed quickly. Mortgage rates are at historic lows, meaning now is a good time to lock in a low-rate mortgage. Plus, we’ll have lots of that pent up demand in the real estate market. The bottom line is that, if you were planning to be active in the market this year, you should either be doing something now, or preparing to move fast when life starts to get back to normal.

‘Spring market’ delayed
Whenever things start to get somewhat back to normal, I expect the market to surge (i.e. sales to spike) to ‘catch up’ – if not by summer, then early fall. There will definitely be lots of pent-up demand, and that will likely lead to a hotter market at some point later this year.

Again, if you want to buy or sell this year, be ready – and for you home sellers, now is probably a good time to tackle a few projects around the house (or condo)!

Now is a great time to reach out
We’ve all heard it a million times by now, but it’s true: we can all help each other get through this! Support your friends and neighbours in ways that are responsible, safe and sanitary – while maintaining social distancing! 😉 Keep in touch with friends and family any way you can. Most of us are already doing it, but try to think of somebody you *haven’t* heard from recently, and reach out to say hi – it might make somebody’s day!

Real Estate During COVID-19

March 24th, 2020 Posted by Blog No Comment yet

Interesting times, eh? Many businesses have been shut down in the last week or so, but many are still up and running – including real estate… for now! TRREB continues to see new listings every day, and plenty of sales. I’ll admit that I’m a bit surprised, but it’s happening. These are strange times, but if you need to sell, and/or if you’ve spotted something that you want to buy, we can probably get it done.

Since much of real estate is conducted in person – client consultations, home valuations, showings, open houses, home inspections, etc. – it would seem like real estate would be a prime candidate for a shut-down – and it may yet happen. However, at least so far, business has continued with some interesting modifications. Here are a few:

  • No public open houses. This makes sense, and really doesn’t require any further explanation. 😉
  • No over-lapping showings. Sometimes, we allow more than one agent to take their buyer(s) through a home at the same time. This practice has been paused for now in an effort to limit physical contact amongst strangers.
  • Video showings – I’m not sure how common this will be, but it’s possible for an agent to, for example, walk through a listing with FaceTime or Skype going, and show a potential buyer more details than would be apparent via a standard virtual tour. (I have actually done this before, for an out-of-town buyer.)
  • Encouraging people viewing a property to follow hand washing and sanitizing guidelines established by health officials.
  • Using disinfecting wipes to clean commonly-shared surfaces like door handles.
  • Reminding clients viewing a property to avoid touching surfaces or items in the home.
  • Refraining from greeting others with handshakes or hugs (#socialdistancing!).
  • Encouraging sellers to thoroughly clean and disinfect the house after viewings.
  • Requesting that clients notify their Realtor if they become ill within two weeks of an open house or showing. If an attendee does become sick or is diagnosed with COVID-19, we’ll want to communicate this with the homeowner and other attendees if possible.
  • Being extra diligent about tracking who attends the property, including the date, time and their contact information. In the event of an infection, we want to be able to provide the information to local public health authorities so they may investigate further.
  • Having buyers provide deposits via e-transfer, instead of a physical bank draft (which saves a trip to the bank, followed by a visit to the listing Brokerage, and further handling of the paper by staff, etc.).

Most of the above are obvious, and just require a reminder from time to time – but, we do need to be extra mindful of taking precautions.

The bottom line is that, for now, real estate business is still being conducted, and I’m here for you if you need anything!

January-February 2020 Market Review

March 11th, 2020 Posted by Blog No Comment yet

To start the year, I’m combining January and February into one review. 😉 Plus, I’ll make some comments about interest rates near the end.

January 2020 basically picked up where 2019 left off – busy! The pace of sales increased 15.4% (4,581 this January over 3,968 last January); at the same time, the number of new listings declined (again) to 7,836, from 9,456 last January. By the end of the month, there were just 7,772 listings available, down 35% from 11,962 last year! This now-familiar dynamic between the number of homes available and the number of sales caused the usual upwards price pressure: the average sale price hit $839,363, up 12.3% over the average for the same month last year (which was $747,175).

By the way, TRREB is now reporting seasonally adjusted, month-over-month changes in sales activity. I’m not sure if that will help with understanding the market – except to help identify when the spring and fall markets start and stop – but for the record, January sales were up 4.8% over December….

Condo sales in the 416 remain strong. Sales were up 9.7% and the average price was up 15%.

TRREB also noted that “the MLS® HPI Composite Benchmark price was up by 8.7 per cent compared to January 2019 – the highest annual rate of growth for the Benchmark since October 2017”. Detached houses and condos were the biggest contributors to the change in the weighted average.

February 2020 was also a big month. There were 7,256 residential sales in February, up a whopping 45% over February of 2019 – but, it’s important to note that February 2019 saw a 10-year record low for sales (just 4,982). The big sales increase was somewhat mitigated by 10,613 new listings, an increase of 7.9% over the same month last year. However, by the end of the month there were just 8,816 listings available, down 33.6% from last year. The resulting price pressure drove up the average sale price to $910,290, +16.7% over the February 2019 average of $779,791.

TRREB reported that the sales activity in February was up by 14.8% over January. This shows some momentum over the last few months, but that’s to be expected at this time of year. We’ll have to see how this month-to-month data develops as the year progresses before I decide how I feel about this new metric; I’m not sure how helpful it will be. For example, it’s reasonable to expect that the COVID-19 panic will slow down sales this month – but I’d bet anything that the market will surge back to balance when the fears blow over. So, the month-to-month data could end up being misleading to some….

Condos had another good month. Sales activity increased by 26.2% and the average price increased by 18%, to $722,675.

TRREB’s MLS® Home Price Index Composite Benchmark was up 10.2%. Townhouses had the smallest increase in price (10.5% – not exactly a ‘small increase’!) and condos had the largest increase in price.

Interest rates are dropping this week, partly due to the COVID-19 scare. (Rates are more directly related to bond prices, but the decline in bond prices may also be related to the COVID-19 scare….) If you got a mortgage last year or the year before, it may be worth speaking to your mortgage broker or bank and ask about the possibility of breaking your mortgage for a new one at the current rates. BEWARE OF THE PENALTIES! Don’t assume that today’s lower rates will make up for the cost of penalties – it depends upon who lent you the money, and what terms are in the mortgage. All I’m saying is that it’s something to consider/talk about. Contact me if you’d like to speak to one of my partners in the mortgage industry.

29 Unity Rd – fully renovated 3 bed, 3 bath semi – **SOLD!!**

October 18th, 2019 Posted by Blog, SOLD!! No Comment yet

Unity Rd is in a small development off Greenwood Ave, just a few blocks south of Danforth. Built in 1981, number 29 Unity Rd has been extensively renovated by the current owners since they bought it about 7 years ago. Improvements include new hardwood floors, an all-new kitchen, three bathrooms, windows, doors, a new roof and a fully landscaped back yard (with carport).

The home is located just three short blocks from beautiful Monarch Park, which features a playground, a dog park, a swimming pool, and a skating rink – not to mention mature trees and quiet places to sit and relax. And, at the east end of the park is Monarch Park Stadium (fully covered in winter). The park is a true gem of the East End!

It’s just about a 10 minute walk to Danforth Ave, and all the shops, restaurants, pubs and services it has to offer – and Greenwood Station. If you need the highway, just pop down Greenwood/Leslie St to the Lakeshore, or head up Greenwood towards the DVP – your escape routes are close by! 😉

The local public school is Earl Haig, with high school options being Monarch Park CI and Danforth Collegiate & Technical Institute.

 

 

43 Gainsborough Rd – beautiful 3 bed, 2 bath semi **SOLD!!**

June 7th, 2019 Posted by Blog, SOLD!! No Comment yet

Located near Gerrard and Coxwell’s Little India (AKA India Bazaar AKA Ashdale Village), Gainsborough Rd is a pleasant, tree-lined street of mostly semi-detached homes. Number 43 is a fantastic home set near the bottom of the street, just south of Eastwood Ave and just a few doors up from Moncur Park. It has a renovated kitchen, two nice bathrooms (5 piece upstairs, 3 piece downstairs) and hardwood throughout. The three bedrooms are larger than average, and the finished basement includes a rec room and loads of storage. There’s also a great front porch – perfect for getting to know the neighbours – and a beautiful back yard.

Just a block away from the #22 bus route, this location offers quick access to the subway, but there’s plenty of nearby amenities – standard stuff like banks and grocery stores, but also interesting options like Lasiy Daisy’s cafe, Godspeed brew-pub, The Pantry (an artesan cheese shop), Sanagan’s Meat Locker (a butcher) and Lake Inez.

Monarch Park, Greenwood Park , Orchard Park and Woodbine park are all within walking distance, as are the beach (and The Beach!) and Leslieville. If you have to head downtown you can hop on the 506 Carleton or walk down to the Queen St 501.

There are great schools nearby, too: Bowmore Rd (Junior and Senior), Roden PS, Equinox Holistic Alternative School (housed inside Roden PS), Georges-Etienne-Cartier (Catholic French). High schools are Monarch Park, Danforth Tech (although local kids also attend Riverdale CI) and St Patrick.

I’ll be hosting an open house this Saturday and Sunday, 2-4pm both days. Please do pop by, say hi and check out this great house!

 

March 2019 Market Review

April 4th, 2019 Posted by Blog, Market Review No Comment yet

This is interesting – the market was almost exactly the same in March, 2019 as it was in March, 2018! Check out these numbers:

Number of sales: 7,187 – just ONE fewer than March 2018.

Average sale price: $788,335, up just 0.5% over $784,514 recorded in 2018.

New listings: the biggest change; 13,996, down 5.1% from 14,753 last year.

Active listings: 15,576, down about 2.5% from 15,971 in 2018.

Condo sales: volume was down 14.1% in the 416, but the average sale price was up 2.3%, to $603,969.

One good sign for the market is that the number of active listings is up from 13,284 last month. Also, the average sale price last month was $780,397, so there’s been a bit of movement there, too. I think that those indicators point to a market that’s picking up steam for the spring. The spring usually generates more listings, which gives buyers more choices, thus drawing them into the game. Once that gets going, it usually rolls along until sometime in June, so we’re looking at two or three months of real activity. It’s a great time to buy and sell.

The fact that the market is essentially flat compared to last year contradicts the much-ballyhooed notion that Toronto is rapidly becoming un-affordable. In fact, prices are down significantly from that price spike we had in 2017. In March of that year, the average sale price was $915,126 and still rising. Since the correction that went through to about August of 2017, when the average sale price bottomed out at $732,292, prices haven’t gone up much – just about 7.7%, or a bit above inflation.

Of course, anybody in the market wants to see some price increases, and I expect that we’ll get back to the normal rate of 5-to-7% per year sometime in the near future. That’s both affordable for buyers, and it rewards home-owners for their investment.

 

80 Glenshephard Dr, ** SOLD **

February 25th, 2019 Posted by Blog, SOLD!! No Comment yet

*Update – it didn’t take long for this great little house to sell! The current owner is looking forward to the  move to his new place, and the buyers are super excited about their first buy. 🙂

Glenshephard Dr is a great little street that makes a ‘U’ shape off Danforth Rd near Brimley Ave in Scarborough. Lined with well-maintained bungalows on wide lots with private drives, it makes for a quiet little pocket that’s close to public transit, shopping and lots of local amenities.

My new listing at #80 is a renovated three bedroom (one currently used as a dining room) home with hardwood floors, a walkout to the new back deck, parking for four and a large workshop at the back of the property. The large, south-facing back yard is open and sunny – a great place for a vegetable garden!

The basement is finished, and has a fully separate unit. It’s not retrofitted and wasn’t built with a permit, so it’s not considered an ‘apartment’. However, it wouldn’t be hard to get the proper paperwork to make it legal.

The local elementary public school is Walter Perry PS, the intermediate is Robert Service Sr PS and the high school is the highly regarded R.H King Academy, with the option to apply to David and Mary Thomson CI. All in all, this is a great area.

 

 

 

January 2019 Market Review

February 11th, 2019 Posted by Blog, Market Review No Comment yet

As expected, January was a slow month in the Toronto real estate market. Just 4,009 sales were reported, up a wee bit from 3,987 last January. (For reference, there were 5,188 in January 2017; 4,640 in January 2016; and 4,318 in January 2015, so the last couple of Januarys have been on the slower side.) The average sale price was $748,328, up just 1.7% from $735,874 this time last year. Basically, the market has been flat since then.

New listings increased 10.5%, to 9,456, and total active listings edged up 0.6% to 11,962. Remember, back in early 2017 when we saw the beginnings of that crazy price spike, there were just 5,034 active listings at the end of that January – down from 9,966 in 2016. That really highlights how super-tight the supply was in early 2017 – and it shows how important supply is and what it can do to the market.

The townhouse segment was the only one to see an increase in the number of sales year-over-year (+4.4% in the 416), and it also had the highest average price increase (+12.3%). At the other end of things, fully detached houses saw the biggest drop is number of sales (-8.6%) and the only decline in average sale price (-8.8%). Taking into account the various types and weighting the averages, the MLS® HPI Composite Benchmark price was up by 2.7% – still basically in line with inflation.

We are still in a time of year when the market is less busy – and the weather can have a real impact. (Think of the last few weeks: cold, snowy, warmer and now cold and snowy again!) Even one or two bad days can slow down sales and make it look like market activity has dipped. February will probably be similar to January. However, for my part, talking to my buyer clients and to other agents, it seems like there’s a lot of demand out there, and lots of folks impatiently waiting for the spring market to get going so that they can buy something. Some of the sale prices I’ve seen reported in the MLS (well over asking) seem to support that. We’ll have to wait and see what happens over the next few weeks and months, but I think we’re in for a busier year and higher prices in the Toronto market.

 

 

December 2018 Market Review

January 11th, 2019 Posted by Blog, Market Review No Comment yet

December was a quiet month in the Toronto real estate market. TREB reports just 3,781 sales for the month, down 22.5% from the 4,876 reported in December, 2017. For reference, there were 5,338 sales in December, 2016, and 4,917 in December, 2015, so sales last month were well below what we have seen in recent years. The average sale price for the month was $750,180, up 2.1% from $734,847 in December, 2017.

TREB also released the annual stats, which deserve some comment. In comparing 2018 to 2017, it appears that the market is ‘down’ year-over-year. But, while the average sale price for the whole year declined 4.3% (for the whole of the GTA), that’s not because the market is trending downwards. Rather, it is because of the massive price spike that occurred in the first quarter of 2017, when prices surged roughly 30%, only to drop right back down to almost exactly the pre-spike level by mid-year. When those super-high sales are averaged over the whole year, they obviously draw up the average.

A more helpful approach is to look at what happened *within* 2018. The average sale price in January, 2018 was $736,783. By June it was up to $807,871, and then down to $750,180 by the end of the year. (That pattern is fairly normal: in January, 2017 the average sale price was $768,351; by June it was up to $791,929 and then down to $734,847 by December. This is generally due to the seasonal cycles of the real estate market.) So, while the market was definitely flat (which has its pros and cons…), it was not ‘down’.

By the way, if we back a little further, we see that while the market was at $730,472 in December, 2016, meaning we are up just about 2.7% in the last two years, the average price a year earlier was just $608,714, meaning we are still up 20% over the last three years. Clearly, 2017 and 2018 were unusual, but the longer-term trend is still strongly positive.

Part of the reason for the on-going strength of the Toronto (i.e. 416, excluding the 905) market is demand for condos. Although sales volume in that segment was down 23.9% from December 2017, the average sale price was up 11.4%, which is a significant amount. In fact, the only segment that saw a decline last month was fully detached homes, which has been a recurring theme this year. It looks like buyers have easily made the shift away from the most expensive home type, and found options among semi-detached, townhouses and condos.

There were just 4,308 new listings last month, a decline of 31.5% year-over-year, and just 11,431 listing on the market at the end of the month, down 11.6%. I think that we’ll continue to struggle with that kind of low supply in 2019. We can certainly expect that this month we’ll see a fair few listings that were taken off MLS in December come back onto the market, but it’s too soon to tell if we’ll get the kind of supply that we used to get. Either way, it’s usually a couple of months into the New Year before the listings start to tick up for the spring market.

Also, the Bank of Canada decided this week to keep rates steady for now, and that’s probably a good thing for the economy (which has some issues) and the real estate market. Unless (and/or until…) something external happens, the Toronto real estate market should keep humming along this year. With price increases at the low end of what we have seen in the last 15 years or so, buyers should be able to meet their needs; and with continuing demand, sellers will be able to sell. Overall, that’s what a balanced market looks like. 🙂

 

 

September 2018 Market Review

October 12th, 2018 Posted by Blog, Market Review No Comment yet

September was a decent month for real estate in Toronto. TREB reported 6,455 sales, up 1.9% over September 2017. I’d call that basically flat (i.e. stable). The average sale price hit $796,786, which was up 2.9% year-over-year. That basically the same as the inflation rate (the August rate was 2.8%). Note that the average price is basically the same now as it was in the spring: in April it was $804,584, and in May it was $805,320. Put another way, affordability – much talked about these days in the media and among politicians – is not running away from buyers this year.

The number of new listings dipped 3.1% to 15,920, and by the end of the month there was a total of 20,089 listings (of all types) available, up 5.6% over September 2017. We haven’t seen this many listings in the month of September in the GTA since 2013, when we had 20,194. After that year, September supply declined to a low point of just 11,255 listings in September 2016. Low inventory meant rising prices – the average sale price that month was up 20.4% year-over-year. The current level of supply is better suited to a balanced market.

Condo sales volume in the 416 area dipped 5.5%, but the average sale price jumped 11.7%. As I keep saying, condos are a good investment, either for living in or holding/renting out….

Sales volume and average price increased for townhouses and semis, too – but detached houses actually took a bit of a hit, going down 1.4%. Such a small change could be a reflection of the variety of houses sold; take out a few multi-million dollar sales and the average could come down slightly. We’ll see if anything significant happens over the next couple of months.

For now, it looks like a good time to be a buyer: there’s a decent supply of options and prices are stable. That’s not to say that it’s a bad time to be a seller. (It’s not as good as spring ’17 – but so be it.) A balanced market is good for sellers, too, as they can rely on a steady stream of optimistic buyers for their property. One of them will be the right fit. And, since most sellers are also buyers, a balanced market allows those folks to make the move they want/need to make, too.

The fall is usually a great time to ‘do’ real estate. If you’ve been thinking about it, get in touch with me and let’s get it done!