“What do I have to pay to get it?” is a question that some Toronto-area real estate buyers are beginning to ask again.
Rick DeClute of Union Brokerage Realty Inc. says that was a common question during the market frenzy of 2016 and 2017, but he has scarcely heard it from his clients since.
In the opening weeks of 2019, however, listings for good properties are hard to come by and buyers are more willing to compete than they have been for some time.
Mr. DeClute figured that he might see more than one offer for a detached house he recently listed for sale in the Beaches neighbourhood with an asking price of $1.299-milion.
But he was surprised when 10 offers landed on the table and the three-bedroom house sold for $1.681-million.
Mr. DeClute’s sister and business partner, Rochelle DeClute, says the team booked more than 70 appointments to show a semi-detached house listed with an asking price just less than $1-million.
One agent from another company who booked a showing for his clients took the key inside and locked the door. That stalled two other agents who had confirmed appointments around the same time.
“Not a good move on his part,” Ms. DeClute says of the aggressive tactic, which she sees as a clear sign he was trying to keep rival buyers and their agents out.
Six bidders competed on offer night and the house sold above asking.
The DeClutes say the bidding action they’ve seen recently doesn’t compare with the pitched battles of 2016.
“They’re not buying in a blind panic,” Mr. DeClute says.
But bully offers are seeing a resurgence and deals are happening at a faster tempo than they were as recently as the later months of 2018.
Ms. DeClute says that active listings in the east end of the city where she does much of her work were down 16 per cent in January compared with the same month last year. Meanwhile, web traffic is up and showings have doubled.
“The buyers seem to have confidence that they didn’t seem to have in the fall,” Ms. DeClute says.
She points to a dip in some mortgage rates as one reason that buyers might be more willing to clinch a deal. Also, potential buyers who were taking a wait-and-see approach in 2018 may feel more certain that prices aren’t heading down.
People who put a move on hold while they planned for another baby or sent older children off to university eventually become tired of waiting to trade properties, she says.
“People have needs. They have to buy and sell.”
As for sellers, the DeClutes say that their list of people planning to sell is larger than it was last year at this time. Other agents they have spoken to in various parts of the Greater Toronto Area have fewer, however, so they’re not calling an upward trend yet.
The properties on the DeClutes’ roster are coming from across the price spectrum: In the past week, they’ve taken on listings ranging from a bachelor condo unit around the $350,000 mark to a renovated, four-bedroom house that will have an asking price around $4-million.
The DeClutes say that properties are selling quickly in popular neighbourhoods such as the Beaches in the east and the Junction in the west. But farther out of the core, properties are taking longer to sell in areas such as the Bluffs and Guildwood in Scarborough, and Durham Region.
At Royal Bank of Canada, senior economist Robert Hogue still sees softness in the Toronto and Vancouver markets.
In a note to clients, Mr. Hogue points out that some potential buyers in British Columbia have been kept out of play by measures adopted by the provincial and municipal governments. In Vancouver, home resales are running about 36 per cent below their 10-year average, he notes.
The Toronto market has fared a little better, but Mr. Hogue points out that potential buyers in both Toronto and Vancouver have been reined in by higher interest rates and the mortgage stress test.
The Toronto Real Estate Board reported that sales of existing homes rose by 3.4 per cent in January from December on a seasonally adjusted basis, he adds.
In Vancouver, a market tilted in favour of buyers is exerting downward pressure on prices, he explains, but in Toronto demand and supply are more balanced.
The composite benchmark price rose 2.7 per cent in the GTA last month compared with the same month last year. The composite benchmark price for the Vancouver area dipped 4.5 per cent in January compared with January, 2018.
Mr. Hogue says a double-digit price drop from peak to trough appears to be in the making in the Vancouver area – and that outcome may not be a bad thing, in his opinion.
“Lower prices – whether in Vancouver or Toronto – will help alleviate the severe affordability issues that currently represent a major source of vulnerability,” Mr. Hogue says. “We continue to believe that the risk of a full-blown housing collapse is remote in either market given the strength of their economies and demographic underpinnings.”
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