Cold weather puts Toronto’s spring housing market on ice

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The Greater Toronto Area real estate market may see buoyant sales in the upper echelons – if only the unsightly banks of grey, hardened snow and ice would disappear from the landscape.

Real estate agent Jimmy Molloy of Chestnut Park Real Estate Ltd. says sales and listings in February of 2019 have been slower than the same month in previous years because snow and ice from a series of blizzards remains frozen on the ground.

“I think the weather has delayed it without question,” Mr. Molloy says of the market action.

Now, Mr. Molloy is encouraging most clients who are planning to list a property for sale to wait until after public and private schools have held their March breaks.

In January, the owners of a house on Tranby Avenue in the Annex were poised to sell. When Mr. Molloy saw a stretch of benign weather in the forecast, they quickly launched the property onto the market.

Mr. Molloy set an asking price of $2.275-million and welcomed offers any time. After one week, the property drew two bids and sold for $2.388-million.

Not long afterward, bouts of “wintery mix” began to pummel Southern Ontario.

“If we had waited another week, it would have been dead,” he says of the buyer traffic.

Mr. Molloy says homeowners are discouraged from listing when the weather is bad because getting around by vehicle is so much more difficult for potential buyers. On Tranby, many of the Victorian houses do not have parking and finding a spot on the street becomes more challenging as the snowbanks build.

Sellers also cringe at the thought of house hunters tracking ice and mud through a finely polished home, Mr. Molloy points out.

He expects more listings to arrive on the market when the snow banks diminish.

“We’re all awaiting a little bit of a melt.”

Mr. Molloy is optimistic that the market will pick up once more listings arrive. Potential buyers are less likely to move up or down when there’s little to choose from. But he says they are out there.

“There is pent-up demand.”

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According to a forecast by Royal LePage Real Estate Services Ltd., buyers in the carriage trade segment will push up the median price of a house in the GTA to $3,691,700, to mark a 3.2-per-cent increase in the 12 months ended Jan. 31, 2020.

The median price of a luxury condo unit, meanwhile, will rise 5.4 per cent to $2,390,405 in the 12 months ended Jan. 31, 2020.

Royal LePage thinks the boost for high-end houses will come from a more active spring market, while sales of luxury condos are expected to remain stable.

Royal LePage deems detached houses selling above $3,092,476 to fall into the luxury segment in the GTA. Condos above $1,543,909 in the GTA are considered luxury units in the Royal LePage outlook.

In the year ended Jan. 31, 2019, luxury condo units in the GTA posted a 10.2-per-cent jump in median price to stand at $2,268,571. The median price of a detached house in the carriage trade slice, meanwhile, rose a more modest 3.1 per cent in the 12 months ended Jan. 31 2019 to stand at $3,575,702.

Royal LePage agent Elli Davis says sales of carriage trade houses declined sharply in the months leading up to the spring of 2018 before recovering later in 2018.

“While demand for luxury houses softened last spring, demand for luxury condominiums remained consistent and strong,” Ms. Davis says. “This demand quickly put upward pressure on luxury condo prices because the inventory for luxury condo buyers isn’t there. We have a shortage of luxury three-bedroom listings with the finishes and amenities that buyers are looking for.”

Mr. Molloy thinks that more selection on the market would stimulate activity in various price segments. Homeowners don’t want to risk selling one property and then not being able to find another.

“The $3-million seller doesn’t know where they’re going to go.”

Mr. Molloy says the closing weeks of 2018 were a nervous time in the luxury market.

Turbulent stock markets and the spectre of rising interest rates unsettled buyers in December, he says.

“All of that caused a lot of dismay with people.”

But in early 2019, the outlook has brightened, he believes. Climbing interest rates are no longer a serious threat and a rally in the Dow Jones Industrial Average and other stock markets has boosted confidence.

Mr. Molloy says high-end buyers are having a hard time finding properties that suit them. Some will drive by a house they admire and snap a photo. They tell the agent that’s the house they would like to buy.

Mr. Molloy then has the delicate task of approaching the homeowner to find out if they would consider selling.

“I usually send a letter first – it’s a little bit more polite,” he says.

Looking past the upcoming March break, Mr. Molloy expects some balmy temperatures will bring the usual spring bounce.

“If we get some bright, sunny days, get snow off the streets and get the curbs cleared, it will be great.”

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