Toronto’s real estate market wafted towards the end of 2021 at a gentle pace.
But as the whirling subsided, buyers and sellers were reaching agreements – even on Christmas Day.
“Strangely enough our business continues,” says Elli Davis, a real estate agent with Sotheby’s International Realty Canada. “Serious agents are coming out.”
Ms. Davis sold two properties during the week before Christmas and a third on Dec. 25.
Ms. Davis’s clients are condo owners who were not yet ready for a public launch on the Multiple Listing Service of the Canadian Real Estate Association, but they were interested in selling if she could discreetly find a buyer.
Ms. Davis listed the property “off market” and sent the word out through her network of agents and prospective buyers.
At a quiet time of year, a client who had been waiting for such a property stepped up and the two sides came together on Christmas Day.
“It was just the perfect fit,” Ms. Davis says.
A few days earlier, Ms. Davis sold a three-bedroom detached house in the Kingsway with one offer.
The house at 33 Grenview Blvd. N. was listed with an asking price of $2.395-million and sold for $2.275-million.
Ms. Davis says she welcomed offers any time when she listed the house in mid-December. One set of potential buyers was watching to see if the property would spark a bidding war and sell above the asking price.
Ms. Davis says the house had 10 to 12 showings but the buyers were able to strike a deal without competition.
“They sort of sat back and waited to see if it would go over and it didn’t,” she says.
While some buyers pause their search, others have more time away from work and other activities.
“People have time to look over the holidays too,” she says.
In early December, real estate agents Todd Skinner and Jimmy Molloy of Chestnut Park Real Estate Ltd., listed a semi-detached house in the Annex with an asking price of $4.489-million.
While many homeowners were putting off listing until after the holiday season, the property at 28 Elgin Ave. was being sold by the estate of the late owner.
The three-storey house had been owned by the same family for 60 years, and the original Victorian wood trim and plaster mouldings remained intact.
The agents showed the house empty of furniture, with vintage wallpaper in the hallway and floral curtains at the windows. The property is in need of renovation from the six bedrooms on the top floors to the unfinished basement.
“This was the way the house was built,” Mr. Molloy says. “You didn’t have to look through a seventies reno.”
Despite the overhaul needed to bring the house up to date, the agents booked 35 showings.
The sellers received six offers and the property sold for $4,905,025.
“If something does appear, it gets attention,” Mr. Molloy says. “There are so many buyers out there.”
By mid-December, Mr. Molloy was advising clients to wait until after the holidays to list. A slowdown around the same time happens every year in neighbourhoods such as Rosedale, Forest Hill and Yorkville, he says.
“It really has gone quiet,” he says. “I don’t see a wave of supply.”
Mr. Molloy has a few properties lined up for sale in January, when buyers will be back in the hunt, but he’s watching the current wave of the pandemic with caution.
He expects inventory to remain tight during the rising tide of COVID-19 infections as the Omicron variant takes hold.
“I think that will stop people from listing.”
Rishi Sondhi, economist at Toronto-Dominion Bank, notes that Canadian house prices reached astronomical levels in 2021 but he expects further gains in 2022.
Mr. Sondhi predicts price growth despite the fact that, as of the third quarter of 2021, affordability is at its weakest point since the mid-1990s.
At the same time, the Bank of Canada has strongly signaled that it will raise interest rates, beginning in the middle of next year, in order to bring inflation under control.
TD is forecasting three rate hikes in 2022, followed by three in 2023.
Mr. Sondhi adds that higher rates may exert a drag on demand as they make affordability even more challenging for aspiring homeowners and investors.
“After all, skyrocketing home prices have already made it tough for people to enter the market, and rising interest rates should make it even tougher,” he says in a note to clients.
Mr. Sondhi believes, however, that growth in employment, income and population should help to keep sales elevated and offset the impact of higher rates.
Mr. Sondhi also points to the mortgage “stress test,” which offers ample room for rates to rise before buyers are crowded out.
Tight inventory combined with healthy demand will support house price growth, he forecasts.
Your house is your most valuable asset. We have a weekly Real Estate newsletter to help you stay on top of news on the housing market, mortgages, the latest closings and more. Sign up today.