Condo Sales SOARED in April!
Here are important excerpts from a great Report by Carl Langschmidt posted in his blog about the state of the Condo Market in Toronto! He has some good advice for you and I wanted to share some of it with you!
And so the market continued its hot streak through April with no signs of slowing down, contained solely by the constraint of listings. Even the Toronto condo market has been tight in particular property categories like larger, family-sized units and hard lofts.
Let’s take a look at April’s sales figures recently released from the Toronto Real Estate Board and how first time buyers and sellers may need to shift their thinking to ensure success.
Toronto Condo Sales Reach New Heights as the Only Viable Housing Option for Many Buyers
There just aren’t enough houses to go around – whether it be detached, semi’s or rows – and that picture isn’t going to shift in the foreseeable future. Sales are down year-over-year in the low-rise housing categories in Toronto with prices continuing to rise to historic levels. The average price of a detached home in Toronto reached $1.258M in April while active listings of all homes across the GTA were down a striking -27% year-over-year.
This isn’t a central Toronto phenomenon; the suburbs are experiencing similar, sharp increases in prices but note that unlike Toronto, we’re also seeing a rise in the actual number of sales in the 905 year-over-year.
That actually makes the price increases all the more dramatic on the surface but keep in mind that this sales increase doesn’t mean that supply is meeting demand outside of Toronto. There are more buyers looking for homes than ever before all around, and not enough listings to service them.
Given what we’re seeing in the low-rise categories, it’s no surprise that the Toronto condo market is on fire. Sales are up 17.4% in Toronto with prices also up well above historic annual value growth at 7%.
Stock issues with low-rise housing is likely the biggest factor fueling the condo market but we’re also seeing a dramatic rise in first time buyers thanks to low mortgage rates and rising rents. It doesn’t take much convincing of young buyers these days to show the value in owning a home versus renting. The trouble lies in saving the down payment which is getting increasingly tough as the average cost of a Toronto condo for sale continues to rise.
The short of it is, it’s not getting any easier for people to get a foot on the property ladder. Nor is it getting easier to make that second, third or fourth move; homeowners are scared to list their home and then not find anything else. But inaction isn’t the answer either if you’re unhappy with your current living situation. So, what’s a buyer and seller to do?
Advice for Buyers & Sellers
It’s hard to give blanket advice in these posts because every client, every situation, truly is different. That’s why it’s important to have extensive consultations with your Realtor before ever hitting the property trail together. But there are some general tips which apply in many situations.
The popular Broadview Lofts, unit 430, for sale as of date of publishing. Asking $679,900 SEE LISTING
Tips for First Time Buyers
For first time buyers, three pieces of advice we want to run through today are to a) be flexible, b) spend some time researching before you hire a Realtor and c) hire a Realtor who is experienced in the property type you want (whether it be a condo or a freehold home) and neighbourhood you’re looking in.
Flexibility is the Key to Buyer Success in a Hot Market
Flexibility is your number one ally in scoring a great condo in a reasonable amount of time. And this means flexibility on your condo wish list – nobody gets everything they want in this market unless they have $2M+ (or very low expectations!) – but also being flexible with your time. You have to move fast in this market and that will likely mean time off work and changing your social plans last minute to jump on a new listing or being available all evening on offer night for back & forth negotiations.
Flexibility on your wish list is clearly also critical with so many more buyers in the market competing for the same, good listings. There is a learning curve for first time buyers and there’s really no way to circumvent that other than to go through the process yourself and learn first-hand the reality of what your budget will get you. But the most successful first time buyers are the ones who learn fast, keep emotion in check and understand that, in order to get your dream home, you need to make a few purchases and sales of “the ones before the one”.
You’ll never get your dream home without taking the first step on the property ladder and so focus on making a wise investment with that first condo purchase.
PH824 in the Mystic Pointe Warehouse Lofts for sale as of date of publishing. Asking $389,900. SEE LISTING
Do Your Homework
A good Realtor will spend much of their time with first time buyers consulting and teaching them about both the condo market and the process of buying a condo – everything from understanding true market value (not getting sucked in by under-listing tactics) and how to win bidding wars to the types of things you need to think about before deciding on condo ownership if you’re a total newbie (how condos operate, what it is you really own and are responsible for maintaining, the ins and outs of maintenance fees, etc).
But to make this process as quick as possible, ensuring you don’t lose weeks or months of valuable time while condo prices continue to rise, it pays to educate yourself on the basics. We hope you’ll use our site to research average prices in the neighbourhood and buildings you’re interested in to make sure that your condo dreams are viable on your budget.
Great value in Mississauga for a 3 bed, 2 bath unit at 3025 Queen Frederica. Asking $260,000. SEE LISTING
On the other side of this is to know that you can’t know everything. Hire a Realtor whom you trust and listen to what they’re telling you, even if it’s not something you want to here. For example, if I think your budget isn’t realistic for what you want, I’ll tell you so and encourage you to adjust your expectations (or increase your budget here viable) before we get on the tour bus. This isn’t being bullish; it’s being practical in today’s climate.
Hire an Experienced Realtor..
It’s always nice to give a friend a chance to vie for your business but you should interview several agents before deciding on the best fit for you. You have to put your own interests first when making your final selection. This is the biggest purchase of your life and it’s important that you know, like and trust your agent to due their homework on the building, the neighbourhood and has a proven track record in giving accurate opinions of value on properties.
An seasoned agent can tell you which listings not to even bother viewing because of issues with the building, exactly what to look for in the status certificate, etc. etc. What you don’t want is a personal driver who’s just taking you around on viewings and putting down on paper whatever you say. A Realtor’s core value is in their ability to interpret and apply market data & trends and in their ability to negotiate circles around their competition. That’s the kind of Realtor you want on your side.
Tips for Sellers
If you’re thinking of selling your condo, think about a) buying before you sell if you’re moving up to a house, b) ensuring your Realtor is bringing stellar marketing services to the table, and c) just like buyers, the need to be flexible.
Luxury loft living in our latest listing – unit 206 at the Abbey Church Lofts. Asking $1,295,000. SEE LISTING
If You Want to Sell Your Condo & Buy a House, Don’t Discount Bridge-Financing. Talk to Your Bank & Realtor About the Pros and Cons of Buying Before You Sell.
It used to be that Realtors would always recommend selling your current home before buying. You’d request a close period of 60, 90 or 120 days and that timeline worked for most clients. But that was yesterday’s market. In today’s market, it can take 6 months or longer to find a place – particularly if you’re looking for a freehold home – and then you have anywhere from 30 -120 days to wait until close.
Negotiating bridge financing with your lender allows you to carry two properties until the condo you’re selling closes. This is scary, the idea of carrying that much debt, but if your current property is “sellable”, the possibility of bridging two properties for a few months may be less scary than the prospect of being homeless. A lot of condo sellers looking to make the move into the freehold housing market find themselves putting their furniture in storage and moving in with family or friends for a year while they try to find a house, suffering from the listings shortage and fierce bidding wars.
And the reality is, you may not end up needing that bridge if you’re selling a desirable condo, particularly if you end up attracting multiple bids and can dictate the closing date.
The exception to this would be a) if your condo is an undesirable for whatever reason or a dime-a-dozen generic unit that may take longer than the usual days on market to sell or b) if you’re downsizing from a house to a condo and you want to know exactly what you’re getting for your current home before making a final decision on your max condo budget.
A gorgeous dream loft at the Candy Factory Lofts, unit 304. Asking $1,300,000. SEE LISTING
Make Sure Your Realtors’ Marketing Plan is in Your Best Interest
It’s even more important as a seller to hire an expert and sort the flash from the substance. Pricing strategy is the most critical part of the marketing mix to nail but don’t forget about promotion. And don’t get fooled by flashy print advertising and free calendars. A lot of the advertising you’ll see from neighbourhood Realtors isn’t helping you sell your home faster or for more money.
Nine times out of ten those promotional tactics are used to promote the Realtor, not your home. That’s why you’ll see so many postcard drops of Sold properties sold for 115% of list!! (except they don’t tell you it was under-listed by 10-15% to start with).
Realtors live or die by the leads they generate and tools like neighbourhood postcard drops and open houses are one of the best ways for them to meet your neighbours and prospective buyers who are not already represented, i.e. it’s a way for them to generate new business. A lot of these tactics won’t hurt you either and so you may think “no big deal”. And it isn’t – providing it doesn’t suck up all the marketing budget. You want to make sure that your Realtor’s leaving marketing budget for the things that will help you sell your home for top dollar and that’s almost invariably staging, photography and videography.
Staging isn’t merely a nice to have. In some instances, it’s a must do. If it’s determined that your home needs it.
Beyond staging, don’t under-estimate the power of great photography and video work. The vast majority of buyers today find their own homes using MLS and sites like ours. That main listings picture is their first impression of your condo unit in a sea of other listings. You can’t sell your unit if you don’t get people in and a great online presence is your #1 way of getting prospective buyers interested in seeing your place.
Be Flex-i-ble, Be Be Flex-i-ble
Chant it with me, sellers.
Flexibility is just as important for sellers as buyers. Even though this is a sellers’ market, if you want to have a happy buyer who doesn’t come to the negotiation table with their back up and if you want to create the conditions for a potential bidding war, you need to make it easy and pleasant for prospective buyers to view your home, even when it’s inconvenient for you.
That means leaving your condo or house in “view ready” condition every morning when you leave for work. It means ensuring the key is left where it’s supposed to be (and this falls to your Realtor to manage). It means accommodating those last minute viewing requests even though you’re supposed to be given an hour’s notice. Remember, it’s a short period of pain for a whole lot of gain.