Episode 103: The price gap between houses and condos is wider than ever

This week, condos added some much-needed supply, with nearly 100 new listings added to the mix. Although condo sales backed off a little from last week, we are still quite bullish on the condo market as we approach the end of Q1.

But, our urban North and four other communities I follow aren’t adding as much supply and buyer activity is still strong. The luxury markets are still flying like mad. We’re about to list another fantastic home at 231 Grace Street, which should fetch over $3mm.

In 2022, we’ll see a lot more $3mm to $6mm homes downtown. And, we should continue to see ‘days on market’ drop as new supply gets scooped up with pre-emptive offer activity.

Whenever we’ve had such a vast price gap between houses and condos, houses have taken a break, and condos have gone for a run. There’s no reason to believe things will be any different this time around.

As we approach April’s interest rate announcement, everyone is still unsure what the federal government will do. Historically, buyers have taken a step back ahead of these announcements, so we should see a general slow down towards the end of March.

Sellers, it would be in your best interest to get to market right now, especially if you are selling a house. We can already feel buyers getting super annoyed and backing off from offer nights in some cases. Don’t worry, pricing is unlikely to change.

You can read my comments in last Thursday’s Toronto Star article here.

The market is still heavily undersupplied for both condos and houses, but it seems as though some house buyers are getting a bit fed up.

Fed up with the offer process. Fed up with the unpredictable sale prices and just fed up with the whole process of competing against 30 other buyers for their dream home.

To reiterate previous market reports. Just because some supply is added and sales slow down does not mean that prices will also decrease. Historically, Toronto’s urban markets have been quite resilient. We’re not a market full of panic sellers.

In 2017, when the Wynne government announced the Ontario Fair Housing Plan, the urban markets pulled back a little. Perhaps 5%, but the suburban markets were the real tragedy. Why? There was a lot of speculative buying by unqualified buyers, and prices skyrocketed. People were flipping paper (assignments) all over the place.

Ahh, the good old days before the stress test.

We get it. Being a buyer in this market is not a fun place to be. Even more miserable if you aren’t adequately prepared and working with a pro who understands the areas you’re shopping in and can provide access to off-market opportunities.

Our buyers aren’t even allowed to set foot in a new property until we’ve had a full consultation with one of our buyer agents. We go over paperwork, processes, emotions – everything. It’s the only way.

But, I digress…

Fully prepared and engaged buyers are still winning. They understand that real estate is a long-term hold. They know an extra $10K is not the end of the world. A winning buyer understands that “blind bidding” doesn’t contribute to high prices. But, more importantly, the buyers who are winning are those that have total trust in their agents to go out there and win for them.

We will see a shift to new listings coming out at higher prices (especially for houses). Listing at $999K and selling for $1.5mm won’t be as common. But, listing lower than market value is still what you need to do in most cases to achieve a successful sale.

It’s funny seeing younger agents complain about the low listing strategy. You’ll often hear them say, “umm…why don’t you just list at a price you’re willing to accept?” I wish it were that easy!

Sale prices are so unpredictable that you may as well list for a dollar. If I want $1.4mm and I list for $1.4mm – I’m still likely getting multiple offers anyway, so I might as well list at $1.1mm and allow time for everyone to come through and make their offers.

Being on the listings side, it’s sad to see so many buyers come to the table with inexperienced agents thinking they have a shot at the property. Most of the frustration of offer nights by unsuccessful buyers is due to their agent’s lack of due diligence. The “lets’ give it a shot…you never know” mentality.

“Giving it a shot” just adds to the frenzy of offer nights and wastes everyone’s time. Stop that nonsense!

If you’re a new agent, you have no business working with buyers and sellers yourself! You MUST be working with an experienced mentor or get yourself on a team when you’re starting. You’re not helping anyone buy “faking it till you make it,” it’s selfish.

Apologies for the rant. I get highly activated when I witness underserved buyers and sellers, knowing that our team can deliver a better result and experience.

Anywho – please find me on Twitter as I’ve been more active there these days.

Have a wonderful day, and don’t forget to share this. We have over 42,000 subscribers, and the list keeps growing. Thank you for that!

And, don’t forget to follow us on Instagram and Facebook. We post some real-time stats on our channels you don’t want to miss. You can also catch up on my 2022 real estate forecast post here.

That’s all for today; thanks so much for your energy and attention. If you want some clarity on the market and your specific situation, please DM, comment below or email Ara@thespringteam.ca.

Urban Markets: Downtown & Surrounding Areas
House Average Price: $1,975,262
House Median Price: $1,737,500
279 Active Listings
72 Firm Sales This Week
Months of Inventory (MoI) ~ 0.62
Average Days on Market ~ 8.76 DoM

Condo Average Price: $877,635
Condo Median Price: $790,000
760 Active Listings
197 Firm Sales This Week
MoI ~ 0.65
Average Days on Market (DOM) ~ 9.86

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $3,435,707
House Median Price: $2,716,888
60 Active Listings
13 Firm Sales This Week
Months of Inventory (MoI) ~ 0.71
Average Days on Market ~ 19 DoM

Condo Average Price: $1,496,700
Condo Median Price: $1,225,000
143 Active Listings
15 Firm Sales This Week
MoI ~ 1.45
Average Days on Market ~ 9

Leaside, Davisville, Yonge & Eglinton
House Average Price: $2,265,350
House Median Price: $1,882,500
22 Active Listings (nearly doubled week/week)
10 Firm Sales This Week
Months of Inventory (MoI) ~ 0.50
Average Days on Market ~ 7 DoM

Condo Average Price: $826,009
Condo Median Price: $815,000
55 Active Listings
23 Firm Sales This Week
MoI ~ 0.59
Average Days on Market ~ 9 DoM

Birch Cliff
House Average Price: $1,138,600
House Median Price: $1,060,000
19 Active Listings
5 Firm Sales This Week
Months of Inventory (MoI) ~ 0.61
Average Days on Market ~ 12 DoM

Kingston Rd Corridor to Highland Creek (NEW Week 2)
House Average Price: $1,490,622
House Median Price: $1,408,000
45 Active Listings
19 Firm Sales This Week
Months of Inventory (MoI) ~ 0.60
Average Days on Market ~ 9.72 DoM

Condo Average Price: $768,400
Condo Median Price: $805,000
26 Active Listings
5 Firm Sales This Week
MoI ~ 0.54
Average Days on Market ~ 20.4 DoM

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