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the next move

Condominiums and other buildings in Toronto, on Dec. 30 2019.Fred Lum

The erratic Toronto-area real estate market is heading into December with dwindling listings and a cohort of buyers determined to strike a deal before year’s end.

“In the last two weeks, the faucet turned off again,” says Robin Pope, broker with Pope Real Estate Ltd., of the decline in new listings.

A flurry of properties arrived on the market in late October and early November, he says, but now many home and condo owners are immersed in the holiday season. With buyers still circulating, the inventory in the downtown condo market is shrinking, he says.

“The market is changing sometimes at a pace we don’t even realize,” Mr. Pope says.

Farah Omran, economist at Bank of Nova Scotia, notes that nationwide real estate sales rose 8.6 per cent in October, on a seasonally adjusted basis, from September. That marks the largest monthly increase since, July 2020, she points out.

Listings also rose 3.2 per cent, seasonally adjusted, in October from September. That much smaller rise in inventory, compared with sales, pushed the MLS House Price Index up 2.7 per cent in the same period.

After falling in September, when sales had increased, a rise in listings in October was only one-third as high as the rise in sales – far from what’s needed for a proper catch-up, Ms. Omran says.

Against that backdrop, timing and luck influence the outcome of many sales, Mr. Pope says.

Mr. Pope recently listed a two-bedroom unit at Cabin on Dovercourt Road after a unit in the boutique building sold well above asking.

“My client wanted more – as all sellers want in this market,” he says.

His client’s two-level unit had many upgrades and museum-quality decor, Mr. Pope says, so he set an asking price of $1,150,000 and decided to set an offer date.

“It’s actually a strategy I don’t use often in the condo market.”

Several days before the deadline, a bully bidder stepped up with an offer. At that point Mr. Pope was obligated to notify all of the other agents who had shown interest in the unit, and one of those agents brought another offer.

The unit quickly sold for $1.325-million.

“My client had quite high expectations,” Mr. Pope says, but the sale price was more than she was hoping for and $75,000 more than the last sale in the building.

But in another part of downtown, a seller with a desirable unit needed to exercise a lot more patience.

In that case, Mr. Pope listed a one-bedroom-plus-den unit with an asking price of $925,000 on the first business day after Labour Day.

The unit in the King Street West area had a large terrace, which many people have been coveting during the pandemic, so Mr. Pope expected buyers to pay a premium for the outdoor space.

After a few weeks, the unit was still on the market.

“It hadn’t sold and showings weren’t brisk.”

Mr. Pope says the feedback from buyers’ agents told him that some of their clients were considering two-bedroom units for about the same price.

Two-bedroom units in that price range don’t come with large terraces, Mr. Pope adds, but some people were moving – not only for more space – but more usable space, he says.

The market had been slow in September so Mr. Pope waited for the pace to pick up. Eventually he lowered the asking price to $899,999 but showings continued to drop off.

As the fall market wound down, a fresh set of buyers saw the unit and moved quickly to submit an offer. After a bit of back and forth, the two sides struck a deal.

“We sawed it off firm at $876,000,” Mr. Pope says.

Compared with the Dovercourt sale, the process was lengthy and required the owner’s patience.

“Not everyone is having the same experience,” he says. “The experience of one seller differs from the next.”

Mr. Pope says the fall kicked off with a higher level of inventory in the condo market, but gradually it is being absorbed.

“If anything, I see the inventory levels shrinking and shrinking.”

Mr. Pope adds that buyers may take a second look at some properties that have been sitting now that fewer new listings are coming on.

Mr. Pope worked with one buyer who looked at a unit in the Distillery District that was listed slightly above $600,000 and failed to sell on offer night. When it was relisted, Mr. Pope checked out the prices comparable units had sold for, and the buyer submitted an offer in the high $680,000 range.

The buyer was not able to reach a deal with the seller, who kept holding out for an amount above $700,000.

Mr. Pope kept an eye on the property and, over the next several weeks, it was listed with a variety of asking prices between $599,000 and $718,888.

Recently, Mr. Pope saw that the unit had finally sold.

“This seller – this stubborn, stubborn goat – his patience paid off,” says Mr. Pope. “The moral to this story is, we can give people advice based on what things have been selling for, but sometimes you get lucky. This stubborn goat got lucky.”

In the segment for single family homes, properties in good locations are still hard to come by. When one does arrive on the market, many buyers jump into competition, he says.

Mr. Pope has been working for months with one couple looking for a detached house in east end neighbourhoods such as Leslieville and Riverdale.

Recently, they found a house they liked with an asking price of $2.2-million on Riverdale Avenue. The house needed some improvements but they were willing to take on the work.

When Mr. Pope looked at sales nearby, he found a similar house in much better condition had recently sold for $2.5-million.

His clients decided to submit an offer of $2.25-million for the Riverdale Avenue house so they would have some room in the budget to renovate. The seller received six offers and the house sold for $2.6-million.

That’s $100,000 more than the house in much better shape, Mr. Pope points out.

Now the clients are back to waiting for another contender to pop up.

“Every day I just look at the hot sheet, looking for four bedrooms,” he says. “It’s frustrating.”

As December begins, Mr. Pope figures it will be 2022 before they find a property and attempt to outbid their rivals.

“My clients are still looking for that very elusive four-bedroom house in the east end. Probably we’ll be looking again in the spring.”

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