In late September, Markham, Ont., real estate agent Leslie Benczik placed a “for sale” sign on the lawn of a four-bedroom house in a traditional Markham sub-division.
Two days later, a buyer stepped forward and paid just less than the $1.2-million asking price.
That’s the kind of quick action the suburban 905 area around Toronto hasn’t seen in a couple of years.
That same week, Mr. Benczik drew two offers for a more luxurious Markham detached listed with an asking price of $1.488-million.
The four-bedroom house was on the market for about two weeks, he says, when one offer landed on the table. Mr. Benczik notified the real estate agents and potential buyers who had been to see the property that an offer was on the table.
“Finally I was able to draw a second offer out of the woodwork,” he says.
The action wasn’t exactly a 2017-style frenzy, but it does mark a significant pick-up in the pace of buying: Mr. Benczik points out that large, detached suburban houses have been languishing on the market for months at a time.
“A lot of them have gone through multiple price reductions – sometimes with many agents,” he says.
Markham, Aurora, Richmond Hill and King City are some of the areas that were particularly hard-hit after the Ontario government of the day introduced a foreign-buyers tax and other measures designed to cool the housing market in April, 2017.
Mr. Benczik recently became the fourth listing agent to tackle one property. In the core districts of Markham, Mr. Benczik estimates only about three or four houses sold in the price range of $1.5-million to $2-million in all of last year.
But the mood has shifted and buyers no longer seem to be waiting around for deeper price cuts.
The latest numbers from the Toronto Real Estate Board show that sales of detached houses in the Greater Toronto Area jumped 29 per cent in September from the same month last year.
That pace outperforms the broader market, which rose at a 22-per-cent clip in September compared with September, 2018.
The average price of a detached house in the 905 rose 4.5 per cent last month compared with the same month last year. The average price of a detached house in the central 416 area code edged up 1.2 per cent last month compared with September, 2018.
TREB says new listings in the GTA dipped 1.9 per cent in September from September of last year. The industry organization says those tightening market conditions lead to an accelerating annual rate of price growth.
At Toronto-Dominion Bank, economist Rishi Sondhi points out that seasonally adjusted sales in Toronto were essentially flat in September compared with August. That performance compares with a strong gain in Vancouver, where activity continues to recover from the extreme lows observed earlier in the year.
“On balance, these performances met our expectations, doing nothing to alter our view that so long as the fundamentals remain intact, housing will contribute positively to growth moving forward,” he says.
In the suburbs, Mr. Benczik says, he can sense the market’s brio through the volume on showings and the number of people passing through weekend “open house” events.
Mr. Benczik says the fact that a few properties in the 905 have attracted competing bidders is evidence of the strong demand and low supply.
“Through the course of 2018 there was a lot of reluctance.”
Sellers have become acclimatized to market realities, he adds, which means that most accept that the record prices of 2017 are in the past.
Recently, the issue of vacant houses has attracted the attention of some politicians. The provincial government of British Columbia rolled out a speculation tax on underutilized or vacant homes in 2018.
Mr. Benczik has seen some suburban neighbourhoods where the trend is noticeable.
“I’m definitely seeing vacant homes.”
Mr. Benczik says the neighbourhoods that appealed to investors during the run-up in 2016 and 2017 are also the areas where many homes appear to be uninhabited.
In some cases, it’s apparent the houses are unoccupied because maintenance of the property is slipping.
“I think that’s where the public gets upset.”
Also, the rental market is tight and that makes the spotlight on vacant homes that much more intense, he adds.
In some cases, the investors are overseas buyers who are reluctant to make the homes available for rental because they’re not sure how long they are going to keep them, Mr. Benczik says, adding it can be hard to sell a property if the tenant is not co-operating.
Some speculators who live overseas are also hesitant to hire a rental management company, he adds, so they let the property sit instead.
Over all, Mr. Benczik says he does not believe policy on housing and other issues under discussion in this month’s federal election are having a large effect on buyers or sellers in the real estate market.
“I haven’t come across anybody delaying their decision because of that.”
Most consumers – particularly if they are buying – are more focused on the direction of interest rates, he says. “That’s been a big conversation in the past couple of years.”
Mr. Benczik believes a drop in mortgage rates has encouraged first-time buyers to move into the market and existing homeowners to trade properties in recent months.
A solid client can obtain a five-year fixed mortgage with an interest rate of 2.59 per cent, he says.
“Interest rates are at an incredible level.”
Generally, October is the biggest month of the fall market, Mr. Benczik says, and November is often busy, too.
“We’ve still got a lot of the fall market ahead of us.”
Looking ahead at the rest of 2019 and the spring market in 2020, Mr. Benczik cautions that the market is unpredictable. Geopolitical tensions surrounding Brexit and the impeachment investigation of U.S. President Donald Trump are just two of the factors that could roil economies and financial markets.
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