As September came to a close, it’s almost as if house hunters in Toronto hit “pause.”
Patrick Rocca, broker at Bosley Real Estate Ltd., sensed it in the bidding wars that didn’t materialize and more muted activity in general.
“I’ve noticed it in the last week.”
Not that the market has ground to a halt, Mr. Rocca says, but he is wondering if buyers are hesitant to move too quickly. The vacillation has been apparent in the high end for some time but now it seems to be percolating down to houses below $1-million.
One nicely-renovated Leaside house that Mr. Rocca listed with an asking price near the $950,000 mark drew two bids last week but neither offer came in above the asking price and both had conditions attached. The sellers accepted one but they’re still waiting to see if the conditions are met before they can put up the “sold” sign.
Conditional offers are definitely a sign of a more tepid market, says Mr. Rocca.
Still, some properties are going quickly: One three-bedroom semi-detached with an asking price of $859,000 received five offers and sold for $100,000 more than asking.
This week, Mr. Rocca represented the buyers of a Leaside bungalow that had an asking price near $800,000. His clients put in an offer above asking and beat the one other competing bid. On another sale this week, he represented the buyers of a two-storey, three-bedroom house in the $1.2-million range. But selling a house with any type of hindrance – say it’s located on a busy street or needs a major renovation – is much more flukey these days.
At prices above $1.2-million, the market remains slow. Potential buyers have been circulating through a house Mr. Rocca has listed for a little above $1.6-million, but so far no one has come up with a bid. Even if buyers wanted to argue the price is $50,000 too high, he says, they haven’t shown up to haggle.
“I’m surprised I haven’t even got an offer on it,” he says.
The buyers know houses in that price range aren’t moving quickly, so they bide their time. “I think they feel they have more time to make a decision.”
Mr. Rocca thinks the market could remain a bit sluggish through the fall but he doesn’t anticipate a large downturn. Interest rates have been rising, but we haven’t seen the type of spike that would deter house hunters or cause a lot of pain to people with mortgages, he says.
In the $500,000 to $800,000 segment, he doesn’t think buyers will vanish. “There still is no supply and there still is a lot of demand.”
Between the open houses and appointments for one property he listed recently, about 80 groups passed through the door. If some of those prospective buyers moved to the sidelines because of higher interest rates or a worsening economy, it would still take a huge swell in listings to meet the demand, he points out.
“Even if 30 leave the market, you’ve still got 50 people who are looking.” Meanwhile three sellers have already approached the broker to say they are thinking about selling in spring, 2014.
“It’s not uncommon,” for people to start thinking about the spring this far ahead says Mr. Rocca, “but it’s a good sign.”