Toronto's real estate market has been faltering since May of last year – with a few sputters before that. Currently, mad bidding wars in some pockets contrast with stagnation in others. So far in 2013, some buyers have been bargain-hunting with the notion that they would jump in before sales take off again in a spring run-up. Others are holding out in the hope of a better deal in the months to come.
Numbers from the Toronto Real Estate Board this week surely quashed a lot of the optimism that this spring will bring another run-up to new highs. The spring market gets started in February and last month's sales in the Greater Toronto Area fell 15 per cent from February of last year. That the TREB feels the need to point out that 2012 was a leap year and therefore February had one extra day makes it seem worse, somehow. The last month we saw sales increase on a year-over-year basis was May, 2012.
To get March off to a lively start, Bank of Montreal cut its lowest mortgage rate to 2.99 per cent. That eye-catching number juiced sales when banks offered it in 2012.
Meanwhile, the average price in the GTA edged up 2 per cent in February compared with the same month last year.
Some homeowners pull their houses off the market rather than settle for less than their asking price.
But economist David Madani of Capital Economics points out that such a stand-off took place in Vancouver, too, before the falling sales eventually dragged down prices.
Real estate agent Brian Elder of Royal LePage Real Estate Services Ltd. says prices seem to be holding up, but he advises buyers to think about where they would like to live for a while so they don't have to worry about fluctuations.
"I don't think anyone should be thinking short term in this kind of market."
He sees some reluctance among buyers to enter bidding wars, though resistance isn't as strong as it was in the fall. For those who don't want to compete, he recommends seeking out houses that need some work.
The flashy ones end up with all of the attention, he says, and aspiring buyers can get a better deal if they are willing to renovate.
"In the end, you've got the flashy one."
Mr. Elder still sees a schism between condos and single-family houses.
"We're still dealing with two distinct markets."
It is mainly detached houses in prime areas that draw multiple offers.
Listings are scarce and prices are buoyant. But even within that market, agents are seeing surprises, says Mr. Elder, with a certain unpredictability as to which houses will spark a bidding contest.
Meanwhile, in condo land, the dynamics are also continually shifting.
Many units are sitting for some time and buyers are not in a rush.
But one unit in the Radio City building near Church and Carlton drew five or six offers and sold for about $50,000 above the asking price of $399,000, says Mr. Elder.
"There's never a lot of turnover in that building at any one time," he says.
Christopher Harrop of Sutton Group-Associates Realty Inc. agrees that condo buyers are cautious.
He doesn't advise owners who are selling to hold offers on a certain date.
In most cases he recommends listing with a realistic asking price.
Bidding wars over condos still take place, but they are far less common than they are for houses and townhouses.
"The freehold market is more aggressive."