Sure, why not – let’s continue the theme from last week!
On Friday, I told you tales of “the week that was,” and how things are starting to get very busy again in the freehold market here in the central core.
Some readers suggested that the sales figures don’t live with the stories I tell, so I thought today, I’d double down.
Except today, I’ll be telling stories from this past weekend about journeys with buyers both inside the central core, and outside as well…
Let’s start today’s blog with a little survey, shall we?
Last week, we started to see a lot of new inventory in certain segments of the market, specifically those where product had previously been lacking.
a) A sign of things to come
b) Double the inventory, since no seller in their right mind would list before a long-weekend?
But no matter how you slice it, we saw a lot of new listings in the sub-$1M freehold market last week, and I might say, anecdotally, more than triple what we saw the week before.
I speak, of course, about the central core of the 416. Last Friday’s blog post prompted a discussion by the readers with respect to where the market strength is, and where we’re seeing weakness. It was also prudent to look at the sales figures (both price as well as units), and determine in which areas those massive red percentages can be applied.
So let me tell you about my weekend, and the interactions I had with three buyer-clients, and perhaps this will either settle the debate, or fan the flames.
My work-weekend started early, with a 5pm appointment on Friday night to check out two houses with one set of my young buyer-clients.
The first was a semi-detached, 2-bed, 2-bath, with parking, and a finished basement, priced at $739,000.
We didn’t “love” the house on paper, but it was in the location that my clients desired.
In this market, I find that buyers are either primarily motivated by location, or property type. That is to say they’re either set on a location, and they seek the most for their money in that pocket, or they’re set on the size/type/style of home, and they’ll take it where they can get it, for what they can afford.
These clients were set on the location, and thus this house, at $739,000, with an $875,000 target sale price, made a lot of sense. This would keep them well under their max of $1,000,000 even.
Unfortunately, there was almost nothing we liked about the house, other than the price.
The house backed onto an apartment building, and while that’s not a deal-breaker, it could be seen from the front of the house, the living room, the kitchen, and standing on the back-deck made you feel like you could hear a conversation from one of the balconies on the other side of the fence.
The house was really small, and it was felt in every room. The living room had space for two fewer people, the dining table was a round 4-top, the kitchen was 2/3 the size of what we felt would be acceptable, and the upstairs bedrooms were tight.
It was a “pass” through-and-through, and we moved on to the second house.
The second house was fantastic! A semi-detached bungalow, but a great footprint. 25-foot wide lot, and a huge 138 feet deep. 2-car parking behind the house, and an incredible deck and backyard.
But it was only 2-bedrooms, and where my clients were in life, it surely wasn’t a 10-15 year home.
Perhaps at the right price, this house would work, but what is the right price for a house you know you’ll be moving out of sooner than you had anticipated?
I called the listing agent, somebody I knew well, and talked shop.
As I spoke to her, my phone beeped, and it was a message about a bully offer being registered on the first house – the 2-bed, 2-bath semi-with the apartment in the backyard! How ironic.
The agent for this house told me that 13 buyer agents had already asked for a copy of the home inspection (a good indication of interest), and that a few people had “thrown out” the price figure that I had asked her about.
It was a tough house to price. The buyer pool would be unique, and I jokingly told my clients that the likely buyer would be a single old-lady who wants to downsize to the house so she can read books and work on her painting.
After less 48 hours on the market, there were already about 50 Realtor business cards on the counter.
This house was going to sell for a big number, no doubt about it.
Later that night, I saw the sale price for the “first house” on our tour. Listed at $739,000, it sold for $954,000, which was a weeeeee bit more than my $875,000 target. It’s funny, because we didn’t like it at $875,000, but somebody else must have loved it at $954,000…
On Saturday morning, I took out another young couple, but this time it would be more than just two houses.
It would be ten.
Ten houses are what we call a a “tour” in our business, and I honestly haven’t done a tour like this in probably five or six years.
But that is what’s so fascinating about this market! We actually had TEN houses to look at!
The 3-bedroom semi-detached market, on the east side, exploded last week with new listings.
The two toughest markets right now, as I see it, are:
1) 500 square foot, 1-bedroom condos in C01/C08
2) 3-bedroom semi’s under $1,000,000
And it’s the latter that we toured on Saturday.
Touring ten houses in three hours isn’t easy, but it’s made easier with a little preparation.
I told my clients to wear slip-on shoes, and that we’d be driving around in my car – so to drop theirs off somewhere, and meet me at the first house. I sent them a PDF with a map and the ten listings, and told them to bring a clipboard and a pen – which they did.
House #1 was overly-staged, showed worse in person than in the photos, and had a “finished” basement that was good – for two guys sharing a loveseat as they watch the game. It had no parking, and most houses on the street had parking pads, so street parking was next to impossible. It was a pass.
House #2 was charming and traditional, which gave a great first impression. But as we started to consider functionality, we realized that it wasn’t going to work. There was no second bathroom with a shower (the 2-piece bath that was 28-inches from the dining table must have made for some memorable dinner parties…), and the parking pad was illegal. It was a pass.
House #3 was commanding a huge premium because of the private driveway, but it was on a corner, with the driveway access on a very busy street. It had the best basement rec-room of any house we’d seen, but the rest of the house wasn’t what we were looking for. It was a pass.
House #4 had sold the previous evening via bully offer.
House #5 was incredibly disappointing. I had targeted this one as the best option of the bunch, assuming that the work needed was minimal, since I loved the street and the footprint of the house – with great width! But the photos, oh the photos! They didn’t show how much work was needed, and unlike some other houses we’d seen with wide mutual driveways that led to parking at the back of the lot, this mutual driveway could barely fit a Model-T Ford. It was a pass.
House #6 was the lone detached house we were seeing, but I didn’t like it at all. My clients’ friends, who are also my clients, told them to add it to the list. The house itself was decent, but it was past our geographic “boundary,” if you will. They were having an early open house, and it was absolutely slammed. Listed at $699,900, what do you expect? It was a pass.
House #7 was absolutely incredible. Listed at $999,900, we couldn’t figure out why it was still on the market after 14 days. I told my clients that while you might think a house on the market for 14 days, listed at $999,900, was actually available for $999,900, it just wasn’t possible. We were in love. More on this in a moment…
House #8 was also incredible, but we were thinking about house #7, and just blew through this place. This would have been our best option, if not for House #8, and had we seen it first, we’d have been in love with it too. It wasn’t a pass, but was on the back-burner.
House #9 was the third incredible house in a row, and my clients remarked, “What a change from the morning, eh?” It was true. The house was smaller, with no parking, and it had “everything done,” so there was zero way to add value. But if we could get it under our budget (which I didn’t think we could – this was a late addition to the tour, in a “We may as well add it” kind of way), we’d be all over it.
House #10 was where I first spoke to the agent from House #7. And that was the highlight of the home. It was in an A+ location, but it was a gut. It would make a great home for somebody, just not for us.
So what’s the take-away from the tour?
We ended up making an offer on House #7, which I might come back to in a later blog post.
House #4, as mentioned, sold via bully offer.
House #3 got a bully offer on Saturday night, and promptly sold.
House #9 got a bully offer on Sunday morning, and two more followed. I believe this was sold too.
Ten houses, and three bully offers.
And if you subtract House #7, which was 14 days on the market, and not holding back offers, we have nine houses with offer dates, and three that sold via bully.
That’s 33% of houses selling via bully offer, in a sample size for essentially the same product – semi-detached, 3-bedroom homes in a tight geographic area (save for the one detached).
Perhaps that’s the takeaway from this story, and combine it with Friday night’s experience, where one of the two houses sold via bully offer, and I think it offers an accurate snapshot of this particular segment of the market.
So what next?
What of my tour outside the central core?
Well, it couldn’t have possibly been more different…
Out in a popular pocket of Mississauga, my clients were looking for a detached, 4-bedroom home, on a decent lot, under $1,400,000.
We saw six houses, and there were about 14-15 in this pocket, which
House #1 – $1,249,000 – 4-bed, 3-bath, 2008-built, 38 x 131 foot lot, on the market 45 days.
House #2 – $1,269,000 – 4-bed, 4-bath, 2008-built, 40 x 110 foot lot, on the market 3 days.
House #3 – $1,278,000 – 4-bed, 4-bath, 2013-built, 36 x 89 foot lot, on the market 2 days.
House #4 – $1,359,000 – 4-bed, 5-bath, 2004-built, 40 x 148 foot lot, on the market 58 days.
House #5 – $1,359,900 – 4-bed, 5-bath, 2008-built, 45 x 85 foot lot, on the market 66 days.
House #6 – $1,449,000 – 4-bed, 5-bath, 2004-built, 40 x 110 foot lot, on the market 19 days.
So look at those ‘days on market,’ aka DOM.
45, 3, 2, 58, 66, and 19.
House #2, which had been on the market only three days, had previously been listed for $1,299,900, on the market 33 days.
And house #5 had been on the market previously for 44 days, just for good measure.
There were another four houses priced between $1.2M and $1.4M that we could have added to our tour as well.
And this geographic area isn’t large. It’s like, if I had to guess, maybe half of South Leaside?
To be fair, this is essentially a sub-division, so many of the homes are similar in size, and thus much of what is for sale would be around the same price, give or take.
But that’s a lot of inventory, at one price point, for one area.
And that’s a lot of “DOM” for those homes.
Quite the difference from the central core, wouldn’t you say?
I feel like we can waltz in and make offers well under the list price on any of these homes if we want to, which, of course, we do.
And if one seller doesn’t feel like playing ball, we can go try his neighbour to the right, and then if need be, his neighbour to the left.
The market has changed since the peak in April of 2017, but as I continue to explain to those that are willing to listen, the market conditions vary dramatically from neighbourhood to neighbourhood.
So that was the weekend, bring on the week.
I expect this week to be slow in the freehold market, as few sellers want to list before a long weekend, and review offers after Easter Monday. But beyond next week, I expect to see a lot more listings hitting the market as we move through spring and into summer…