Toronto real estate agent Monte Burris looked out the front window of a Sunnyside Avenue house recently and saw a small crowd lined up on the sidewalk. That was 45 minutes before he was scheduled to receive the hordes at the first open house as the property hit the market with an asking price of $1.45-million.
One week later, the sellers had accepted an offer of $1.65-million.
During the intervening days, they had also repelled a handful of bully offers and turned down the seven other bidders on official offer night.
“It was obvious early on that everyone wanted the property,” says Mr. Burris of Keller Williams Real Estate Inc.
The red-brick detached house has six bedrooms and five bathrooms. Recently renovated, it has a gas fireplace in the foyer, a large kitchen, and an expanse of glass overlooking the deck and backyard.
When the first bullies launched their opening salvo, Mr. Burris advised his clients to wait until the scheduled night for reviewing offers. Bullies often step up with an eye-popping offer, but with the proviso that it’s only good for a short time. They generally refuse to participate in a bidding war.
But listings for detached houses are so thin that Mr. Burris knew the prospective buyers would likely come back to the table.
“I was pretty confident they would all show up on offer night. There’s still very little inventory on the market.”
This one sale is emblematic of the fickle Toronto market right now – or as agents like Mr. Burris are saying more and more – the two Toronto markets.
“Condos are a completely different market,” says Mr. Burris.
That segment is awash in “inventory” as agents say. Sellers are forced to cut their prices or wait a long time for a sale in some cases.
Detached houses will generally attract multiple offers if they are renovated and located in a prime neighbourhood. Condo and loft units will attract multiple offers in many cases if they are in a boutique building or supremely well located. They need to stand out from the competition.
The numbers show how unpredictable the market is now: sales in the Greater Toronto Area remained flat with a dip of about 1 per cent in the first half of April compared with the same period last year. That’s not as grim as the double-digit drops recorded in previous months, but it’s not the spring bounce many agents were hoping for.
Meanwhile, the average price rose 4.3 per cent in the first two weeks of April from the same period last year. Listings rose 16 per cent in the first half of April compared with the first half of April, 2012.
The numbers were buoyed by sales of single-family homes in the suburbs, according to the Toronto Real Estate Board.
In the City of Toronto, sales of detached houses slipped 3.4 per cent compared with the first half of April last year. Condo sales in Toronto declined 4.3 per cent year over year for the same period.
Chander Chaddah of Sutton Group-Associates Brokerage Inc. specializes in the Roncesvalles area. He says sales are definitely down and the market remains spotty.
He’s advising his clients who want to buy to aim for a house that does not incite a frenzy.
“I had to take clients out of an offer last week.”
The house was listed with an asking price of $849,000 and Mr. Chaddah’s clients thought they might be able to stretch to an offer of $875,000 or so. Mr. Chaddah checked out the number of bids on the offer date and told his clients not to get their hopes up. “We don’t have a chance,” he advised them.
The house sold for $1.020-million.
Mr. Chaddah says many buyers seem to fall into the trap of bidding for a house as soon as they know that other people want it.
“There’s no question that there’s this perverse need for affirmation.”
He says house hunters who hear that sellers who find out that they won’t have to join a contest – either because the sellers haven’t set an offer date or because no rivals have shown up – then start to question their own judgment.
“The question starts to creep in, ‘what am I missing?’”
Lots of good houses are overlooked that way, he says, and he thinks buyers often end up paying too much as a result.
“I do more talking people out of houses than I ever do talking people into houses,” he says.
Usually buyers know pretty quickly if a house feels right to them. If it does, he encourages them to be grateful if other buyers are passing it buy.
“If we think it’s a good house, it’s a good house and we don’t need three other people to confirm that. Then I’ll tell them, let’s see if we can go in and knock a couple of bucks off the asking price.”
Mr. Chaddah is wishing that many more sellers will decide to list soon. Often people who are thinking of putting a “for sale” sign on the lawn will wait for spring flowers and budding trees.
“More product,” says Mr. Chaddah. “That’s what I hope happens.”
At the same time, he tells condo sellers that they have to be patient.
“There’s a ton of product out there.”
A really slick condo townhouse, or a high-rise unit with a really good view will sometimes stir up competing bidders, he says.
He worked with a buyer recently who bought a nicely renovated condo on Quebec Avenue in High Park. The asking price was $489,000 and the buyer beat out the other contenders with an offer of $511,000.
“Even when it goes over list, it’s more measured,” Mr. Chaddah says of the action.