A real estate sign sits on the front lawn of a home on Mechanic Ave. in Toronto on March 3 2014.Fred Lum/The Globe and Mail
Last week's Next Move chronicled the launch of a two-bedroom bungalow into the seething mass that is the Toronto real estate market.
Listing agent Sandra Pate, who set an asking price of $679,900, was expecting lots of action because the home's price put it in the target range of buyers who are most affected by an imminent change to rules surrounding mortgage insurance in Canada.
Earlier this week, the one-storey bungalow near the Danforth and Jones Avenue drew 17 offers and sold for $900,100, or a staggering $220,200 above the asking price.
Ms. Pate, of Royal LePage Real Estate Services Ltd., Johnston and Daniel Division, says setting an asking price was tricky because there are so few bungalows in Riverdale, where many of the houses are larger Edwardian-era semis and detached homes.
But, while the house is at the eastern edge of Riverdale, it is within the coveted Frankland Community School area.
Still, the selling price was beyond what she and partner Lina Risi imagined. "We would never have guessed $900,000."
Ms. Pate says the leading bid wasn't the only rich offer – others were not far behind. Two were so closely tied they had a second round of bidding.
During the seven days the house was on the market, more than 84 parties booked showings, and there were open houses.
Ms. Pate figured many of the potential buyers would be rushing to get in ahead of the rule change that comes into effect on Monday. Under the federal government's new regulations, the minimum down payment for new insured mortgages will rise to 10 per cent from 5 per cent for the portion of the house price above $500,000. The 5-per-cent minimum for properties up to $500,000 remains unchanged.
Ottawa had already restricted mortgage insurance to homes valued at less than $1-million, and the new rules leave the minimum down payment for more expensive homes unchanged at 20 per cent.
Some agents have seen a flurry of activity in the segment of the market affected by the change. In the end, Ms. Pate says, the buyer of this property appears to have enough financial backing to be unconcerned with the mortgage insurance rules. Some of the interested buyers were looking for an investment property, she adds, so they too likely would be unfettered by rules around high-ratio mortgages. "It appealed to a lot of different buyers."
Rick DeClute of DeClute Real Estate Inc. found himself at the centre of a mini-maelstrom at a couple of recent sales in the Riverdale neighbourhood. "We're seeing some that are blowing the roof off," he says.
In one recent deal, he listed a semi-detached house at 61 Wolfrey Ave. with an asking price of $789,900.
The three-bedroom house quickly attracted the attention of a bully who showed up several days before the planned offer date with a bid that was good only for a limited time. It's always up to the sellers whether or not they want to look at a so-called pre-emptive bid.
In this case, the sellers had already purchased another house and were happy to get through the selling process quickly, Mr. DeClute says. He notified the other agents who had visited or expressed interest in the house. "Within 90 minutes there were four other offers on the table." The property sold for $931,500, at a premium of $141,600.
Mr. DeClute recently had another nearby semi-detached at 243 Withrow Ave. offered at $799,000. That property made it to offer day and sold for $961,900.
In the Beaches, meanwhile, the pace of sales has slowed a bit so far this year after numbers had a bump in November and December of 2015, Mr. DeClute says.
As of early this week, 29 properties had changed hands in the Beaches neighbourhood year-to-date, Mr. DeClute says. That compares with the 35 a year earlier.
In November and December, 2015, 74 sales were recorded in the neighbourhood. That compares with 61 sales in the same period of 2014.
"Maybe we are a little short in the first few weeks of 2016 because we had a fairly substantial increase during the final weeks of 2015."
Ms. Pate says few new listings are coming onto the market in Toronto this week because the provincial Family Day holiday is approaching on Monday. Sellers prefer not to list when lots of people are out of town, she adds.
Mr. DeClute expects March to be a bit choppy as well because March break and Easter are set fairly close together this year.
In the Beaches, where houses often sell in the $1-million to $2-million range or above, he expects the late spring market to be particularly busy this year.
"A lot of people are hesitating to go on the market in February because of the March disruption," he says. "A lot of people are just holding."
Carolyn Ireland