As uncertainty continues to overshadow Toronto real estate, people from industry insiders to idle observers are speculating about the extent to which the condo and the single-family home portions of the market have split in two.
Real estate agent Geoffrey Grace of ReMax Hallmark Realty Ltd. offers up a fluky tale of three sales that provide a good snapshot. The numbers, he believes, illustrate well the divergence in value in the broader market.
“It just seems that people are betting on the single-family house.”
Mr. Grace points to the action in a former mattress factory that has been converted to a cool loft building near Bloor Street and Lansdowne Avenue. The second setting is Boston Avenue in Leslieville. The story starts in 2009, when Mr. Grace helped a client sell his loft and buy a detached house in Leslieville for $10,000 more than the selling price of the loft.
Now fast forward to October, 2012, and the purchaser of the loft decides to sell. She calls Mr. Grace because he knows the unit. Coincidentally, the owner of the house in Leslieville decides to sell because he’s moving to Hamilton and he too calls Mr. Grace. The loft sells for $399,900. The house on Boston sells for $440,000.
So, in the same period, the loft increases in value by 19.4 per cent while the house swells in value by 27.5 per cent.
“The single detached home in Toronto is the prize that everyone is after,” says Mr. Grace.
Still, Mr. Grace did not set an offer date for the house because he knew the market had slowed.
The house was listed with an asking price of $449,900 and sold for $440,000 after eight days.
Mr. Grace says that supply and demand is one factor: Many more condos are going up than single family houses. But also, condo prices have reached a level that doesn’t make sense to a lot of buyers.
Compared with the house in Leslieville, a nearby loft with the same square footage would cost $700,000, says Mr. Grace.
“It seems people believe the freehold house market will keep going strong.”
Even freehold houses are taking longer to sell, he notes. Buyers hold more power in this market.
“If the house is over-priced, they’re still letting the sellers sit and sweat. But if you have a reasonable price, people will buy.“