16 Aug 2022
Week 128: 91% of active agents have never sold in a market like this.
Week 128: 91% of active agents have never sold in a market like this.
So let me as you a question: How do you feel about the market and the future of Toronto?
I’m constantly scratching my head at the people with a pessimistic view of Toronto Real Estate. Are you a pessimist?
I’ve seen too many people make too much money buying, leveraging and repeating over the years to see Toronto Real Estate as anything but one of the best investments you can make. And that’s when the rental market wasn’t as strong.
Today you can buy a house with two units. Some homes are available with two above-grade units and a basement unit. In today’s rental market, these homes can bring in rents 30-75% higher than last year’s. And since the market is down, you can pick up these investments for up to 10% less.
But that’s where a lot of people are confused.
They think there are these fantastic deals across the board because they heard a less experienced or fear-mongering agent tell you that it’s a blood bath out there. That couldn’t be further from the truth.
There are no better deals than in the condo assignment market. That’s where the real bloodbath is.
With freehold and condos – it’s far less dramatic. We have multiple offers every single day. 2-20 offers on many prime houses and some condos. Bet you haven’t heard about those…(continued after chart)
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Urban Markets: Downtown & Surrounding Areas
House Average Price: $1,520,726
House Median Price: $1,213,400
500 Active Listings
31 Firm Sales This Week
Months of Inventory (MoI) ~ 1.57 (down from 1.77 last month)
Average Days on Market ~ 22.94
Condo Average Price: $772,755
Condo Median Price: $720,900
1607 Active Listings
74 Firm Sales This Week
MoI ~ 2.02 (down from 2.16 last month)
Average Days on Market (DOM) ~ 24.19
Seven weeks in a row of declining listing supply and sales numbers bounce back.
Well, a bounce back from one of the stalest weeks of real estate I’ve ever seen in week 127. But, when compared to an average month of sales, we’re still relatively slow, especially for condos. Last year during the same week, there were 100 more condo sales and only a handful more house sales.
The condo buyer tends to be less affected by the summer slow down as they’re usually still quite active in the City, while many house buyers (especially move-up buyers) are not as active in the summer months.
Look at last week’s numbers here. Nearly 180 condo sales vs. the 74 from last week. That’s purely a result of interest rate hikes removing buyers from the market and buyers who can still afford to buy but are uncertain about the economy and are on the sidelines – for now.
If you can still afford to buy and you’re on the sidelines, just make sure you’re renewing your mortgage pre-approval so you can lock in as low a rate as possible as we head into the next round of increases. (continued after chart)
Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $2,904,833
House Median Price: $2,275,000
124 Active Listings
6 Firm Sales This Week
MoI ~ 2.04 (down from 2.40 last month)
Average Days on Market ~ 37
Condo Average Price: $1,003,333
Condo Median Price: $950,000
179 Active Listings
3 Firm Sales This Week
MoI ~ 2.12 (down from 2.43 last month)
Average Days on Market ~ 37.33
What should you do? You should consider being either a condo assignment buyer or looking for any freehold properties with a separate basement unit. These entry-level freehold investments used to be trading at over a million. Still, there are a few opportunities, mainly in the East End, trading for just under a million and edging closer to 6% cap rates.
We have a great investment opportunity on Gerrard right now. I had it sold on day 1, but the buyer didn’t know what he was getting into, so, unfortunately, he backed out—leaving a great investment on the table served up just for you. Take a look at it. (continued after chart)
Leaside, Davisville, Yonge & Eglinton
House Average Price: $1,656,667
House Median Price: $1,500,000
28 Active Listings
3 Firm Sales This Week
Months of Inventory (MoI) ~ 0.85 (down from 1.65)
Average Days on Market ~ 12.33
Condo Average Price: $708,600
Condo Median Price: $608,000
160 Active Listings
5 Firm Sales This Week
MoI ~ 2.38 (down from 2.53)
Average Days on Market ~ 18.4
The Leaside and surrounding areas continue to pull back listings even at historical lows. I didn’t expect to have too many sales here as these areas are typically slow in the dog days of summer.
But sales are still happening, with anything desirable selling relatively fast.
We have clients looking for development lots here, so if you know anyone, please get in touch!
Again, that reflects who’s out there right now en-masse. Investors, builders, and savvy buyers who understand there’s an upside to this madness.
The people who understand that whatever happens in the coming months, five years down the road, will be laughing. But likely sooner.
They’re not fools. Today’s buyers are making moves for a reason. They understand what a recession means. They get rates still going up.
But they also understand that real estate is a long-term investment. You don’t daytrade it. You don’t react to rumours and news. Nobody should be making any big decisions on the news.
Let’s leave that to the crypto market. What’s that saying? “Buy the rumour, sell the news” doesn’t work in real estate. You should always be buying and rarely selling.
Especially since the rental market is popping off.
We listed three rentals yesterday, and one of them had an over-asking offer sight unseen with a full year’s rent paid upfront.
Who’s renting these places? Why the demand? (continued after chart)
Birch Cliff
House Average Price: $2,065,000
House Median Price: $2,065,000
34 Active Listings
0 Firm Sales This Week
Months of Inventory (MoI) ~ 1.52 (up from 1.55)
Average Days on Market ~ 13
Rental demand is coming from Students and those on international work visas. We have enough homes for rhythm, but the supply problem comes from 2020 when the rental market was trash.
No students were here, so the rental supply didn’t get snapped up by September. So it messed up the rental cycles.
Condos and houses previously available for lease by September aren’t. So that’s causing a mad scramble.
If you’re considering bringing a unit to market soon, do it now. There will also be a peak to this, and it’s coming soon, so don’t wait out if you plan on vacating your unit and making it a rental. (continued below chart)
Kingston Rd Corridor to Highland Creek
House Average Price: $1,098,600
House Median Price: $1,056,000
86 Active Listings
10 Firm Sales This Week
Months of Inventory (MoI) ~ 1.84 (up from 1.82)
Average Days on Market ~ 15
Condo Average Price: $578,000
Condo Median Price: $535,000
65 Active Listings
3 Firm Sales This Week
MoI ~ 2.44 (up from 2.04)
Average Days on Market ~ 15
So with all of that said. Please pay attention to where you’re getting your news from. Also, ask your agent if they’ve ever seen a market like this.
Did you know that 91% of active agents have never sold in a market like this? Work with them if you want, but if you want accurate guidance from someone who knows how to negotiate, you’ll have to call on one of the 9%. And that happens to be us.
Want to talk about real estate? Let’s do it on YouTube 🙂
(don’t forget to subscribe to my new YouTube Channel here, where I go over all of these reports in more detail)
Have a terrific Tuesday, and I’ll see you next week 🙂
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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.
