One of the worst statistics in Real is average prices. First, there is no such thing as an average house or property. Secondly, there is no such thing as an average location. Average prices also have another major problem. It assumes that the mix of sales is the same over time, and that never happens.
Since April, the hottest real estate market in Toronto has been luxury condo sales. In 2016, the highest price for a condo was 6.5 million. This year, the highest priced condo was 11 million. Did you know, sales over 1 million dollars for condos are 86% higher in 2017 than for the same period last year. In contrast, the overall market is down by 16%. So why the sudden interest?
A lot of people seem concerned about our real estate market – especially my agents! Yes, the market has been slow since April, and yes prices have backed off in the house but not the condo market. That’s because house prices had an unsustainable run up – not just this spring but over the last three years where we had double digit price increases.
It's the first week of September which means it's a busy time for renting. Unlike past years, we now have rent controls. So how will this impact Toronto renters? This is not a panacea for Tenants, in fact, rent controls can cause a big problem for Tenants, for the short, and long term.
Sales Commentary The market continued its sales decline for the fourth straight month. Sales on TREB were 5,921 units in July, down 40% from last year’s number of 9,929. Historically, sales should be in the nine thousand range. Are we concerned? No – in fact we prefer this market to that of February and March. Back then, the market was driven by irrational behavior which was unsustainable. The current slowdown is psychological. Sellers still want March prices and buyers expect a price correction of 25%. The reality is neither will happen. Prices are down by 15% from their peak but are still 15% higher than a year ago. The question is: who will outwait the other? Our bet is on sellers! Unlike buying groceries that cannot be postponed, buying real estate can be deferred but only for so long. Real estate is not dominated by speculators and foreign buyers but ... Read More
Kitec is a brand of plastic piping used in residential construction between 1995 to 2007. That means most condo buildings built during that time frame have used it. Kitec is vulnerable to premature failure and many buildings and condo owners have elected to replace it before it causes severe water damage. So what should you do? When you discover the existence in a status certificate, I would not reject buying the condo outright. You may never find the right property for you. If it is just in the condo unit, the cost to replace it is between $5,000-$10,000. So why not do an amendment to reduce the purchase price by that amount. If Kitec is in the common condo areas, to replace that would require a special assessment of each condo owner of about $3,000-$5,000. Again, why not do an amendment to reduce the purchase price by that amount ...
Recently I had a potential seller phone to say that an agent from our Brokerage suggested a List Price that was too low and he would not be listing with us. Why would any agent suggest a list price at all? The role of the agent is to gather market information (solds and current listings) and explain the differences in these properties to the subject property. Interpreting the data is the agent expertise – not setting a list price. So, ask the seller what he would like to list at? Most sellers pick an agent based on list price and commission price versus value. Don’t eliminate yourself because of list price. If the seller wants a list price that is too high, simply say: I guess you are not in a hurry to sell. The seller will ask why?
Today I want to talk about posted listings. Posted listings are those where a Seller wants to list their property on MLS. They pay a Broker a minimum fee to put it up then other brokers have to deal directly with the Seller. RECO says that this is all right. It used to be that when you listed a property, a REALTOR® had numerous obligations to the Seller and was liable for the information posted on MLS. Not anymore with posted listings. It's the wild, wild west! Deal with the Seller direct and try and figure out what they're selling. Many agents avoid posted listings altogether. It's too much work trying to educate the Seller. Those agents who attempt it, have to do both sides of the transaction. Represent your Buyer then do all the paperwork for a non-existent listing Brokerage i.e.: double the work for half the commission.