For sellers of one High Park house, a few square metres of hardwood and a stockpile of patience proved to be highly profitable.
The homeowners recently sold the house for more than the asking price of $1.35-million.
The outcome marked a big improvement on their previous foray into the market in the fall of 2008, says real estate agent Chander Chaddah, who handled the listing on both occasions. Back then, the house was listed for about the same price but languished on the market for weeks. The owners rejected the one half-hearted bid they received and pulled the sign out of the lawn.
Eighteen months later, they got more money than they had hoped for.
“All they did was change a linoleum floor in the kitchen to hardwood,” says Mr. Chaddah.
The 18-per-cent jump in High Park in the first quarter of 2010 compared with the same period in 2009 is one example of the eye-popping gains in prices as real estate sales across the Greater Toronto Area have been turbo-charged by a huge rebound in consumer confidence.
“In September, 2008, people got the bad news that Lehman Bros. had filed for bankruptcy. They got the good news in September 2009 that the market was back,” says Mr. Chaddah of Sutton Group Associates.
That good news for sellers has at long last drawn more of them to the market.
In the downtown core, he says, buyers suddenly have lots to choose from amidst burgeoning condo listings.
“The number of new units coming out there clearly has just exploded.”
In Roncesvalles Village and the west end, where Mr. Chaddah’s office is located, the number of single-family homes for sale has also risen – especially since Easter.
Mr. Chaddah says he advises sellers to list their houses early in the spring market, which actually begins in February. Buyers are eager to get back into the hunt after the market goes on hold in December and January. He adds that too many people wait until after Easter and then find that two or three of their neighbours have put up ‘for sale’ signs at the same time. The abundance of choices cools the bidding wars.
“It’s easy enough to equate the spring market with grass, leaves and flowers that are in full bloom.” But that strategy can backfire, he adds.
“Scarcity is the reason people bid up.”
Mr. Chaddah says he has not seen very many huge bids over the asking price on properties priced above $1-million. But in the $400,000 to $800,000 range, offers often swell to 20 per cent above the asking price. Last week he saw a house in Mimico with an asking price of $450,000 go to a buyer who offered $557,000.
Nationally, existing home sales were a hefty 40.8 per cent higher in March than they were in March of last year.
National Bank economist Marc Pinsonneault says a national house price index created by Teranet and National Bank shows that the rapid price gains that have drawn attention to the Toronto and Vancouver markets lately have started to slow.
“It looks to me as if Vancouver has recently turned into a much more balanced market than before. Toronto is on the verge of doing so,” says Mr. Pinsonneault.
The economist says Toronto is set to see a supply of new condo units as buildings started in 2008 and 2009 become ready for occupancy. That in turn will prompt some homeowners to list their houses as they prepare to move into a new condo. At the same time, housing starts have also increased.
“New construction should help to increase supply again,” says Mr. Pinsonneault.
The economist adds that the return to more balance should ease fears that the Toronto market is inflating into a bubble.
