The Globe and Mail
Excerpted from The Globe and Mail
February 27, 2014
In Toronto, it's a seller's market – but sellers can't find a place to buy
By Carolyn Ireland
At the lower end of the market, sales are quick and multiple offers the norm
The winding streets of a tranquil enclave near the Humber River were swarming with house hunters last week when 18 Langmuir Cres. went up for sale with an asking price of $949,000. Early this week, the Cape Cod-style home on a ravine lot sold for $1.102-million after five parties vied to live there.
"That's an unexpectedly big number," says the homeowners' agent, Theodore Babiak of Royal LePage Real Estate Service Ltd. The house is a project, he says, and will likely undergo a renovation or expansion.
Last week, I wrote about 442 Winnett Ave., a tiny bungalow near Eglinton and Avenue Road. It later sold with 10 offers tabled. The final price was $685,100, or $136,100 above the asking price of $549,000.
Listing agent Ira Jelinek of Harvey Kalles Real Estate says a builder was the winning bidder. He plans to tear down the bungalow and build a spacious, modern house.
While Mr. Jelinek was pleased with the outcome, he would prefer that the market be more balanced. "My buyers lose out on bidding wars."
Amy Polson of Royal LePage Estate Realty echoes that sentiment. She submitted an offer on behalf of her buyers for a house in the $850,000 range near Bayview and Eglinton. Late that night she hadn't heard a word, so she contacted the listing agent only to find out the sellers were still making their way through a deluge of offers. She knew then her buyers didn't have a chance.
Indeed, many house hunters are feeling stymied by the scant supply of listings.
In the west end, Mr. Babiak says there has been a mix of reasonable selling prices and isolated cases of irrational exuberance – mainly under $1-million. At the lower end of the market, for houses under $500,000, sales are extremely brisk and multiple offers are the norm.
But the supply problem keeps everyone bound in place. Mr. Babiak has houses in the pipeline he could bring to market – if only their owners could find someplace else to buy. "This happens year in and year out – especially between the end of January and May."
For mid-priced houses, between $800,000 and $1-million, there are plenty of buyers and few sellers, Mr. Babiak says.
He recently sold a grand tudor-style house at 253 Riverside Dr. in seven days for just under the $1.598-million asking price. The house, built by Robert Home Smith in 1935, still has the oak floors, leaded glass and wainscotting of the period. It also backs onto a ravine.
Mr. Babiak and the homeowners decided to set an asking price that reflected what the sellers were actually willing to accept. The price bracket above $1-million is less predictable, he says, and some other west-end houses around the $2-million mark have been sitting. "There's not a lot of verve," he says.
On Riverside, the owners were willing to accept offers at any time, he says, and the first one arrived on the second day. The offer wasn't a lowball but it was still below what the sellers were hoping for. He figures the buyers may have been thinking that a quick offer would give them an opportunity to score a deal but the homeowners weren't rattled. "The sellers knew what their objectives were."
Sure enough, a second offer came in the next day and the owners worked with that one. After a few days, they deal was complete.
Mr. Babiak says he rarely holds off offers on a house in that price range unless it has every possible advantage in location, renovations and appeal. "If the stars aren't aligned, then I would say 'no offer date.'"
He believes buyers are out there – and a lot of deals are done in January and February when Bay Street hands out bonuses to executives.
Still, sellers who are dug in may have a long time to wait. A couple of high-end houses in Bloor West Village moved only after price cuts, he observes.
"Maybe these sellers are not prepared to budge," he says of some of the houses that have been languishing. "If the sellers are adamant about getting their numbers – if they're not prepared to negotiate – things aren't moving.
"There's not a lot on the shelf. I think demand is there."
Meanwhile, the luxury development Riverhouse at the Old Mill has just started ushering in the first occupants. Some of the those people are coming from large houses in the Kingsway and other nearby areas, Mr. Babiak says, and already some fresh supply has come to market as a result. He expects more as homeowners prepare to move into the area's rising condo buildings.
