Toronto's unsold houses: In a hot real-estate market, why are these properties still for sale?
To avoid the stigma of houses stagnating on the market, more realtors are relisting properties that don't sell quickly. Jill Mahoney takes a closer look at Toronto houses under $2-million that have gone unsold for three months or longer, and the stories behind them
The real estate listing for the detached, two-storey brick house in Scarborough focuses on the positive: "Location, Location!! Bright & Spacious." With an asking price of $799,800, the three-bedroom home has four bathrooms, a finished basement, an attached garage and is in "Move-in Condition."
Oh, and buried in the brokerage remarks: "Seller Declare[s] This Is A Former Grow House."
The onetime marijuana operation on Grenbeck Drive has been for sale for five months, an eternity in Toronto's red-hot real estate market where properties are often snapped up in intense bidding wars in less than a week.
There were just 18 houses with asking prices under $2-million that have been on the MLS system for longer than 90 days as of Thursday. In all, about 600 properties in that price range were listed for sale in the Greater Toronto Area.
While it is not uncommon for higher-end homes to take longer to sell given their lofty prices and smaller pool of potential buyers, non-luxury houses that stagnate can be seen as tainted.
"It definitely makes people say, 'What's wrong with this house?'" said John Pasalis, president of brokerage Realosophy Realty. "In a market where every house is selling in one week, when people see a house that's been on the market for three months, most buyers' reaction is: 'What's wrong with this place? Why is nobody buying it?'"
Industry insiders say it's become common practice for realtors to relist homes that don't sell quickly to avoid the optics of a stale listing. The strategy, allowed by the Toronto Real Estate Board (TREB), can leave some buyers unaware of a property's full listing history and means industry figures on how quickly houses sell don't tell the full picture.
Real estate agent Thomas Neal, who specializes in selling homes in the Beaches, calls relistings the "dirty little secret" behind TREB's statistics.
"When the Toronto Real Estate Board says that the average house sells in 20 days, that's a false assumption because agents relist houses, they terminate houses and then bring them out new," he said. "I think, statistically, the Toronto Real Estate Board allows them to make up fake stats."
Although historical listing data is available and can be accessed by a buyer's agent, TREB does not publicly release the overall relisting rate. The history of an individual MLS listing is the "result of a contractual relationship between a brokerage and its client," the board said in a statement.
The oldest non-luxury listing in Toronto is for a $1.825-million, 2 1/2-storey brick semi-detached in Riverdale that has been on the market since the summer of 2013. The house on Dundas Street East near Broadview Avenue is a licensed rooming house with 13 bedrooms.
The owner, who is selling the home himself and paid a flat fee to a real estate agent to list it on MLS, said a few buyers have expressed interest but weren't willing to pay his asking price. As a rooming house, the property is unlikely to be eligible for a bank mortgage.
"Eventually, it's going to get sold because soon it'll be a bargain," said the owner, who asked to remain anonymous citing privacy concerns.
Also on the list is a two-storey, semi-detached house directly across from a Walmart on St. Clair Avenue West near Runnymede Road that has been on the market for 10 months. Priced at $650,000, down from $755,000, the MLS listing has just one exterior photo and says – twice – that "Seller Would Like To See An Offer."
But in a brief interview, agent Michael Duggal said the house hasn't sold because the owners "haven't been showing it," adding they have recently agreed to start opening their doors to potential buyers.
Most houses that linger on the market are overpriced, agents say. Others may be in undesirable locations, in a state of disrepair, have owners with unreasonable expectations or, as in the case of the former drug den near Steeles Avenue East and Midland Avenue, are cursed with exceptional circumstances.
Over all, homes in the GTA sold in an average of 13 days last month, compared with an average of 20 days throughout 2016, according to TREB. The figure has been dropping in recent years as Toronto's real estate market continues to soar to new heights. Prices for detached houses in the city hit record highs in February, with an average of $1.57-million, up nearly 30 per cent from a year earlier. For all types of housing, including condos and townhomes, the GTA had a record average price of $875,983 last month, up almost 28 per cent from a year earlier.
Statistics about the speed of sales are a key market indicator, but observers point out that the figures don't reflect listings that are pulled on and off the market.
Faced with houses that aren't moving, many real estate agents take properties off MLS and then relist them – sometimes on the same day at the same price – to attract a fresh wave of interest and restart the clock on the all-important days on the market figure. Properties get relisted for a host of reasons: high asking prices have scared off potential buyers, sellers realize their houses need staging, owners switch agents after contracts end and when deals are scuttled after financing falls through.
Agent Faisal Mia recently took a semi-detached, $1,099,888 home in Etobicoke, near Lake Shore Boulevard West and Brown's Line, off the market after 4 1/2 months without any full-price offers. His client plans to relist the property, which backs onto a parking lot near train tracks, in the spring at a reduced price. "We're going to list low and play the game, I guess," he said, referring to the well-known recipe for creating a bidding war.
But some agents and observers say the practice of relisting puts buyers at a disadvantage when bidding on a home if their realtor hasn't taken the time to search for a property's cancelled listings. "In a very fast market where things move quickly, not everyone thinks of it. Some agents definitely overlook it," Mr. Pasalis said.
A property's listing history is not publicly available, something Mr. Pasalis hopes will change. He was a witness for the federal Competition Bureau in a legal battle against the TREB over making housing market data, including sale information and cancelled (or unavailable) listings, freely available online to allow buyers to do their own research. TREB lawyers invoked privacy rights in arguing that such information should not be widely disseminated. Last year, the Competition Tribunal ruled that the real estate board was stifling competition and innovation in the industry and ordered it to open up its MLS data for realtors to post online. But the process was put on hold after TREB appealed the ruling. A judgment is expected some time this year.
"As a consumer you want as much information about a property as possible," said Mr. Pasalis, whose brokerage provides historical listing data to clients on a password-protected website.
As well, a property's listing history does not factor into the days on market calculation when it is eventually sold, even if it was relisted on the same day, meaning that days-on-the-market figures overstate how quickly homes sell and inflate individual agents' statistics, critics say.
The Real Estate Council of Ontario, a self-governing body that regulates the real estate industry, said it is not concerned about agents' reliance on relisting and hasn't received complaints about the strategy. Kelvin Kucey, deputy registrar of regulatory compliance, said property owners are entitled to market their properties as they see fit and buyers' agents are expected to search a property's background history.
Back on quiet Grenbeck Drive in Scarborough, there is no For Sale sign outside the former marijuana grow op and neighbours didn't even know the house is on the market. The listing agent did not return phone calls.
Jim Hay, a retired City of Toronto garage supervisor who lives across the street, remembers coming home one day about five years ago and being flashed a badge by a police officer in an unmarked car parked in his driveway. A few days later, police raided the grow-op and Mr. Hay spotted dozens of marijuana plants through the open garage door. Soon after, he noticed construction crews doing renovations.
Despite the house's checkered past and months languishing on the market, Mr. Hay, who bought his property in 1979, isn't worried about any impact to his own home's value.
"The property around here sells in no time. It really sells quick and the value is a way up there."
Five homes still looking for owners
61 Buttonwood Ave.
The $829,000 duplex on Buttonwood Avenue (the listing mistakenly says Buttonwood Road) near Weston Road and Jane Street has been fully renovated with five bedrooms and granite countertops.
But the late October write-up, which sets a Nov. 10 offer date, has just two blurry photos and the exterior shot crops out a large apartment building behind the house.
67 Keyworth Tr.
The detached two-storey home near McCowan Road and Sheppard Avenue East in Scarborough is listed for $960,000.
It has four bedrooms, four bathrooms and an attached garage bt it backs onto a small shopping plaza, the listing has no interior photos and the property has been for sale since early October.
299 Assiniboine Rd.
With an asking price of $1.15-million, the detached three-storey house is almost 3,000 square feet with five bedrooms and five bathrooms.
But the property borders York University – it is directly across the street from a large parking lot – and has been on the market since late November.
412 Marlee Ave.
The listing for the two-bedroom bungalow with an asking price of $1.45-million targets builders and investors, noting the property is zoned for "many uses."
But the home is on a busy street near Lawrence Avenue West and Allen Road and the seller has been trying to sell it himself since early November.
53 Warwood Rd.
This small three-bedroom, 1.5 storey home is on a huge lot near Martin Grove Road and Burnhamthorpe Road in Etobicoke but has an asking price of $1.998-million.
The early November listing says, twice, that the "Property Being Sold In 'As Is, Where Is' Condition For Lot Value Only" and potential buyers have "No Access To The House" and must register before walking the lot.
TORONTO REAL ESTATE: MORE FROM THE GLOBE