Construction workers work on a condominium development in Toronto December 6, 2012. More skyscrapers -- 147 of them -- are being built in Toronto than anywhere in North America, according to Emporis, the German data provider.MARK BLINCH/Reuters
Broker Patrick Rocca of Bosley Real Estate Ltd. recalls the heady Toronto spring real estate market of 2012 and remembers unremarkable semi-detached houses selling for $900,000 and $1-million.
"There was a lot of stupidity last spring," says the broker with Bosley Real Estate Ltd. "I don't think we'll see that again."
But he also thinks back on the stagnant autumn months and feels confident that the slump is over as well.
"What fall market? We never had a fall market."
But if January is a harbinger for the spring market of 2013, sales will be robust, he says.
"This has been my best January ever," says Mr. Rocca, adding that properties that were barely noticed in December were suddenly snapped up. "There are a lot more buyers than sellers."
Last week he sold a semi in Leaside that was listed with an asking price of $679,000. A bully put in an offer just a few hours after the open house for real estate agents. Mr. Rocca called around to notify the agents who had seen the house and one of them brought a second offer to the table. The winning bid was significantly higher than the asking price, says Mr. Rocca.
The $600,000-to-$1-million segment of the market is active, he says, and tends to remain that way. Sales of the higher-priced houses – especially those listed at $2-million and above – are much softer and have been since last May. His office is busier and the sales board is crowded. The weather this January has been milder than normal, but Mr. Rocca says there is also some pent-up demand. People aren't waiting for February when the spring market typically takes off.
"It is the spring right now," he says of the early start this year.
He is encouraging sellers to list their properties now rather than wait until the leaves are out again. But sellers shouldn't get expect the same prices that they were seeing in their neighbourhoods last spring. Mr. Rocca points out that some neighbourhoods hold up better than others and some houses have more appeal, but as a broad measure, he estimates that prices have weakened by about eight or ten per cent since the peak last spring.
Sellers who put their properties in the market last fall will likely have to relent and trim the asking price, he says, because those listings look increasingly stale as new ones emerge.
"They're going to have to get with the reality of what's going on out there."
Mr. Rocca says some builders who built new luxury houses have gotten in over their heads or perhaps need to accept that they will make a smaller profit.
"That's a bit of a kick in the gut."
But he advises those sellers to look at what similar properties were selling for in the fall – not last March. He thinks prices have likely stabilized now after edging down between May and December. That would be the "soft landing" that the big banks have been forecasting.
He knows one builder who has let a property sit on the market for four or five months. Mr. Rocca could bring him a buyer with a firm offer but the builder refuses to budge.
"He's nuts," says Mr. Rocca.
Carolyn Ireland