Marina Wray is wondering if the housing market in Toronto is experiencing a sudden chill.
The homeowner listed her Seaton Village semi with an asking price of $859,000 in late May and is still waiting to secure a deal.
Ann Dowsett Johnston listed her “wonderful yellow house” in Deer Park in mid-May. The circa 1907 house sold in early June. Despite having been on the market for a few weeks, the property drew competing offers from buyers who had been circling and waiting.
According to some agents, house hunters are still climbing the front steps, but they are more reluctant to play by the “offer night” rules.
In the case of Ms. Wray’s house at 786 Markham St., only two offers came in. The house has three bedrooms and an income apartment in the basement. It is renovated with such family-friendly features as second-floor laundry and a luxurious bathroom with air-jet tub. There’s a one-car garage in the lane way behind the house. It has a chef’s kitchen with a Jenn-Air range and a pot filler. It’s the kind of house that one assumes would have drawn a few bullies within the first hour of listing back in the early spring.
“Of course, we were hoping for a bidding war,” says Ms. Wray. “Everyone is just gobsmacked.”
Ms. Wray was getting the house ready for market through the spring. While preparation was under way, she talked to nearby homeowners and found out they were also planning to sell. “We co-ordinated our time,” she says, so that everyone would not arrive on the market at once.
One house nearby was listed with an asking price in the $899,000 range. It sold in the $1.3-million range with a handful of offers.
Another on the same street had an asking price in the high 700s.
“It was a big, fat fizzle the night of offers for them.”
The following day, she learned, a couple of offers came in – not far above asking.
When Ms. Wray’s house hit the market, more than 60 parties booked showings so she knows buyers are circulating.
One potential buyer put a bid on paper on offer night but it was a lowball. A second offer – conditional on financing and inspection – came in a few days later and she decided to accept it. The couple is moving back from the suburbs and wants to be in a core neighbourhood.
The appeal of Seaton Village makes it all the more baffling to Ms. Wray that her house hasn’t sold as quickly as expected.
She says the feel of community, located near Bathurst and Dupont, is “what makes Toronto so special.” She points to Seaton Village’s block parties and music festival, among other events.
One real estate agent who wandered through one of the open houses at 786 Markham expressed surprise that it was still on the market. But he also confided, sotto voce, that he was advising his own buyer clients to wait until after offer night to table bids.
Perhaps a shift in market psychology is also slowing momentum. May was an extremely busy month in Toronto’s housing market, with sales jumping 11.4 per cent in the period compared with May, 2013.
When listings begin to bloom in the spring temperatures, buyers often become less desperate. If they miss out on one house, they feel confident that another will arrive on the market soon. Back in February, listings were scarce and buyers were so plentiful that many felt they had no option but to plunge into bidding contests.
Ms. Wray’s real estate agent proposed that she pull the listing after offer night, wait a bit and then list again at a higher price.
“I just couldn’t wrap my head around that.”
Ms. Wray says she wanted to consider what’s right and that tactic doesn’t sit well with her.
But she also wonders if young families are increasingly priced out of the downtown core.
Three-bedroom semis are closing in on $1-million in some coveted neighbourhoods as the average selling price of a detached house in the 416 area code now sits at $943,055.
“It’s almost out of their reach,” she says of people raising kids.
Shawn Lackie, an agent with Coldwell Banker R.M.R. Real Estate in Port Perry, Ont., says he’s seeing more people venturing to suburbs east of Toronto for that reason.
Mr. Lackie hosted an open house in Ajax last weekend. Nine couples came through and most of them were from Toronto, he says. Some are selling condo units in the city and looking for a house. Others are first-time buyers.
To the Toronto couples, he says, the asking price, which was in the $400,000 range, seemed surprisingly cheap.
He recently worked with one young couple who lost out on four semi-detached houses in Durham Region before nailing a fifth with an offer $11,000 above the asking price.
Six months ago entry-level buyers could find a semi for $210,000 in Oshawa, he says; now they are looking at $250,000.
“The bar has been raised by 40k.”
Numbers for Durham Region show sales jumped 13 per cent in May compared with the same month last year. The average selling price jumped 9.3 per cent to $390,679 from $357,386 in the same period.
Many young buyers venture to neighbourhoods such as Whitby, Oshawa and Bowmanville because they want a backyard and more square footage.
“There’s a lot more open space to park your car – either in the driveway or on the street in front of your house.”
Mr. Lackie recalls living in the east end of Toronto and paying for a permit to park on the street – then having a hard time finding a spot.
“There’s nowhere near the wacky traffic,” he says, and construction detours are fewer, too.
Highway 407 will be extended to the east as far as Clarington, he points out, and plans are under way to extend GO Train service to the area as well.