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The Toronto-area real estate market is suffering from a lack of commitment at the moment, but James Warren is diligently hanging "for sale" signs on snow-covered lawns. This week, he's bringing out a neo-Georgian in the historic enclave of Rosedale with an asking price of $3.895-million.

"It's one of the paradise islands," says the agent with Chestnut Park Real Estate Ltd. "Rosedale always carries on."

The "paradise islands" Mr. Warren refers to are the pockets that remain relatively stable regardless of turbulence elsewhere in the Greater Toronto Area.

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The overall market is beginning to perk up mid-February, he says, but action is still far below where it was at this time last year.

"You had such a substantial run-up in prices in 2017 and it just wasn't sustainable," he says. "Right now, we're dealing with some hesitancy."

Market watchers say buyers and sellers in all price segments are trying to assess the market's reaction to new, more stringent rules surrounding uninsured mortgages. The spectre of rising interest rates is also hovering over the real estate landscape. And, last year's volatility in sales and prices has some wondering if the market has farther to fall.

Mr. Warren says another factor dampening activity is the slim inventory in many areas. Buyers don't want to go out until there's more to look at and that keeps them from listing their existing property, which would in turn increase the supply.

"You've sold your house for a fabulous price, which is great, but then you have to go out and become a buyer," he says of the mindset keeping people in a holding pattern.

Mr. Warren notes that listings are much more scarce in the 416 area code of Toronto than the surrounding 905 region. "Right now, we're seeing a fractured landscape by location," he says. "I think you have to niche it down."

According to the Toronto Real Estate Board, active listings in the Greater Toronto Area surged 136 per cent in January compared with the same month last year. The supply varies dramatically by area and price range, however.

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Mr. Warren's "islands of paradise" include Yorkville, Riverdale, and the area around Yonge and Summerhill, on streets such as Woodlawn Avenue West and Roxborough Street West. "Roxborough has glorious Victorian houses and it's a boulevard street. The houses on the north side sit gently up on a knoll."

Many of the buyers looking in these areas are empty nesters moving down from larger houses in Lawrence Park, Forest Hill or the suburbs, he says. "They're happy to give up a car and walk out for dinner."

Yorkville has popular avenues such as Hazelton, Lowther, Tranby and Bernard. Young urbanites are moving into older houses, he says.

For younger families who don't have the budget for Yorkville and Summerhill, Leslieville remains extremely desirable. Brick houses can still be found in the high $700,00s, he says, and the lower rents also attract creative coffee joints and boutiques.

The condo market in central Toronto is crazy, Mr. Warren says, because it attracts so many groups – including first-time, move-up and empty nest buyers.

In segments of the market where buyers tend to be more sensitive to prices, interest rates and regulations, the action is unpredictable, industry watchers say.

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Real estate agent Anita Springate-Renaud, of Engel and Völkers in Toronto, says some house hunters are finding creative ways to deal with the "stress test" that came into effect Jan. 1. Under the new rules, borrowers taking out an uninsured mortgage with federally-regulated lenders must show they can still afford their mortgage payments if interest rates rise.

Some consumers are seeking out credit unions and alternative lenders, which aren't governed by the Office of the Superintendent of Financial Institutions, she says while others are resorting to the old standby,

the bank of mom and dad, either for help with the down payment or in some cases cosigning a loan.

Meanwhile, those who are looking aren't finding a lot to buy. Ms. Springate-Renaud knows of homeowners who would like to downsize into a condo but they can't find something that makes the move worthwhile. "I think a lot of them are shocked when they see the price-per-square-foot is higher than for their house – 'and we don't get a garden.'"

That difficulty in finding a condo is also reining in the supply of single-family homes.

Ms. Springate-Renaud says many sellers who have been disappointed recently seem to be waiting to try again in the spring.

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Mr. Warren says some sellers think the depth of winter is not a good time to sell but he wants to get listings out ahead of the increased competition that is sure to arrive after the school holidays in March.

He points out that there are currently 19 houses for sale in the Toronto Real Estate Board's C09 district, which includes Moore Park and Rosedale. Typically, that number is around 25 and – at the height of May – about 46, he says.

This year, 15 sales were tallied between Jan. 1 and mid-February in the area, with 46 per cent selling at or above the asking price, he says. Last year, there were nine sales in the same period with 66 per cent selling at or above asking.

The house Mr. Warren is listing this week is a circa 2002, four-bedroom house on Elm Avenue in Rosedale. The house is unusual because it is relatively new in a district where the homes are protected by heritage conservation rules, he says.

Investors from Asia, Iran and other locations are still interested in buying real estate in Toronto, he says. The 15 per cent foreign buyers tax introduced by the province last year is just a cost of doing business for most, he says.

Mr. Warren believes many buyers from overseas lean towards newer house because they feel older homes are harder to maintain and they're not familiar with the heritage conservation rules. But they do favour Rosedale for its prestige and proximity to highly-rated private schools such as Branksome Hall.

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"I've taken people to look at homes. They like the property but ask if they can tear down the house. I say, no, you have to keep the house."

The environment is very different in the 905 region surrounding Toronto, Mr. Warren says, because there are more new houses being built so it's harder for singular pockets or individual properties to stand out.

Mr. Warren took on a listing in Richmond Hill a few months ago. It was less than 20 years old but there are more Asian buyers there than in central neighbourhoods and many of them prefer newly-built homes, he says.

"It's a difficult market up there. They have a lot of new product up there so it's much harder to compete if your house is 10 or 15 years old."

So while the problem in the 905 is often too much supply, in the 416 it's too little.

Mr. Warren recently listed a duplex for sale in Moore Park, 208 Rose Park Drive, with an asking price of $2.649-million.

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People who have been looking at the two renovated units are considering living in one half and renting out the other to help with the mortgage, he says. The ground floor unit would fetch about $4,500 a month in rent, he estimates. Retirees see the potential to travel while having a tenant living in half of the house. "People are looking to scale down and possibly have some income as well."

Real estate has become so richly-priced in Toronto that people are looking for novel ideas, he says, including communal living in a duplex in a solid neighbourhood.

As for sellers, Mr. Warren recommends that they decide whether they want to price their property aggressively or ambitiously. Houses in the latter category may languish. "If your house isn't selling today, it might be a price issue."

He says three factors are important in selling in the current market: location, move-in condition and price. A well-priced house renovated to today's standards in a coveted neighbourhood will sell quickly, he says. Two out of the three is not bad.

He is not advising that sellers hold off offers to a scheduled time in the current climate. He thinks it's better to set a realistic asking price, accept offers any time and negotiate a deal.

"As a seller, sometimes you can wait out the market, but it depends on your level of tolerance and patience."

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