Toronto home buyers are out in force – but cautious

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The Toronto area’s fall real estate market appears to have bounded off to a fast start this year, but that doesn’t mean that every sale is a slam dunk.

Last week, I wrote about 4 Lucy Ave., which was billed as potentially the “cheapest house in Toronto” by Cheri McCann of Toronto-based McCann Realty Group Ltd., who set an asking price of $399,900.

On the night set aside for offers, two bidders came to the table and the two-bedroom bungalow in the city’s east end sold for $430,000.

“I think people thought it would go higher,” says Ms. McCann, who adds that one agent asked her afterward if the sale price had surpassed $600,000.

The detached house on a 22-by-100-foot lot near Danforth and Victoria Park Avenues was being sold “as is” and potential buyers had to do their own home inspections. But there were “a ton of showings,” Ms. McCann says of the days leading up to offer night.

Even a couple of bullies tried to get their bids in before the scheduled date, but the sellers were not interested in entertaining pre-emptive offers.

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A week or so earlier, Ms. McCann sold a house for $11-million in the Wanless Park neighbourhood.

Many long-time agents continue to find the unpredictability of the Greater Toronto Area market perplexing.

Leslie Battle, a real estate agent with Royal LePage Real Estate Services Ltd., had two listings with two unexpected outcomes in the city’s west end recently.

In one case, a former doctor’s office on busy Royal York Road sold in two days to a bully while, in the other, a quintessential family home on a quiet street around the corner sat without an offer.

“It is a wonky market,” Ms. Battle says.

Ms. Battle says “the buyers are all out” and listings tend to have plenty of showings. But some buyers are still wary.

“It is still a very price-sensitive market,” she says.

Ms. Battle says she thinks lingering summer weather, lower interest rates and clear-eyed homeowners are all contributing to a fairly energetic fall market.

“Sellers are becoming a little bit more realistic in their pricing,” she says.

She expressed surprise that she didn’t receive an offer on the scheduled date for a two-storey detached at 32 Edgemore Dr. in the Sunnylea neighbourhood. The asking price of $1.55-million is “fair,” in her opinion, for a recently renovated house with four bedrooms and two bathrooms.

Ms. Battle says 32 parties booked showings during the week leading up to offer night, but no one submitted a bid.

“With that kind of activity, I thought I would have pulled something,” she says.

Often potential buyers will wait to see if a house sells on offer night, then try to negotiate with the sellers a day or two later if a bidding war doesn’t materialize.

That didn’t happen this time either.

“Even after 48 hours, nothing,” Ms. Battle says. “It’s bizarre.”

Ms. Battle says she didn’t dramatically underprice the house in order to attract attention, which is a strategy many agents use.

At nearby 909 Royal York Rd., the house was listed with an asking price of $1.499-million and had a relatively tame nine showings.

But within a couple of days, a bully stepped forward and the property sold for $1.6-million.

The house has a 50-by-120-foot lot and sits one block south of Bloor Street. Ms. Battle says the location might deter some buyers who prefer a quieter street, but attract others who appreciate the quick access to the Royal York subway station.

But the house has a good layout in the one-and-a-half stories, she says, with two bedrooms upstairs and two on the main floor. Many of the original details have been preserved, including leaded glass windows, French doors and wood trim.

One other factor that might have helped with the sale, Ms. Battle says, is that the front door and driveway both face less busy Meadowvale Drive, so residents don’t need to back out of the driveway into Royal York traffic.

It does not play like a typical corner property, she says, because there’s easy access from the solarium to the backyard deck and garden.

Also, the house once served as a doctor’s office, with a separate entrance on Royal York that leads to the waiting room and office. As a result, Ms. Battle says, the zoning would allow the house to be used as single family and/or commercial property.

And while the former waiting room has been turned into a family room, it would be easy to convert it back, she says. The original office is still there.

Many properties are listed with “offers welcome any time” – especially in an uncertain market – but setting an offer date is partly a psychological tactic, Ms. Battle says.

“It basically sends a message to agents and buyers out there that we’re confident in our list price.”

The bully was represented by Ms. Battle’s husband and real estate partner, Joe Battle.

Ms. Battle says Real Estate Council of Ontario rules dictate that agents must notify the agents of people who have expressed interest when a pre-emptive offer comes in. To be extra cautious, she contacts all of the agents who booked a showing – whether they signalled their intention to submit a bid or not.

“I play it very safe.”

Many of the traditional early 20th-century houses in the area have been torn down and replaced with much bigger houses on the large lots. But Ms. Battle says the property’s asking price meant it was unlikely to attract builders, who typically seek to buy the lot at a reduced price in order to see a profit later on.

“When you’re talking builders, they’ve got to see a big end run.”

At Toronto-Dominion Bank, economist Sri Thanabalasingam says data are painting a complex picture of the Canadian economy.

Mr. Thanabalasingam says the housing market recovery is fully under way, pointing to six straight months of sales increases for existing homes with the numbers reported for August.

The economist says low mortgage rates, healthy labour markets and robust population growth are buttressing the housing industry and leading to sales improvements in most provinces.

By contrast, data on manufacturing activity and retail sales disappointed in July, he says.

As a result of these and other factors, Mr. Thanabalasingam expects the Bank of Canada to cut its key interest rate later this year.

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