The suspense is unbearable!
But suspense has become a feature of real estate. Whether buyer or seller, waiting to see if a property sells and what it sells for can be extremely nerve-wracking and suspenseful!
And it gets far, far worse when you have an offer outstanding, and you’re waiting to see if you beat the other seven buyers…
About two weeks after passing on a unit at 11 Soho Street, my client, Thomas, had given 29 Camden the once-over, and decided that he just didn’t have the financial resources or the desire to leverage himself enough to purchase the unit.
Thomas decided to pass on Unit #304 at 29 Camden, priced at $347,500.
And just to drive home the fact that this unit wasn’t meant for Thomas, the unit subsequently received four offers, and sold for a whopping $387,000!
When something like this happens, feelings are mixed.
On the one hand, you feel great that the unit sold for so much over the asking price because if you were ever sitting on the fence about buying it, you know that you would never have truly been in the running anyhow.
On the other hand, it can be very discouraging when you find a unit you truly like, at a price that is too much to begin with, and it promptly sells for a $40,000 premium!
Interestingly enough, I showed 29 Camden to another client of mine who happens to hail from London, England. When we walked into the unit, the first thing he said was, “Is this a joke?” I wasn’t sure what he meant, and I asked him to elaborate. “This unit is only $347,500? Cripes, this would be at least three-hundred-large quid back home!”
And then some!
He went on to explain that prices in downtown London absolutely dwarf that of Toronto, and we should be so lucky to still be paying $299,000 for standard 1-bedroom condos in the downtown core.
I for one, have always maintained that Toronto is still severely undervalued when compared to other large metropoliton areas around the world, or even North America if you want to get specific.
As shocking as the experiences with Thomas have been, there was an even more unbelievable experience with a unit in The Distillery District that I had my eye on for a client of mine named Shanna.
Shanna came to me a year ago and wanted to start looking for a 1-bedroom condo for she and her boyfriend, Quinn. Money was tight, and they put their plans on hold in 2007 and then contacted me once more in January of this year.
Shanna and Quinn had a maximum purchase price of $250,000, and needed a parking space with the unit. I began to gently tell Shanna how difficult this was going to be to find in today’s market, and she told me “David, don’t worry, we are fully aware that we will be living in a shoebox! We just want something, anything!”
It was refreshing to meet somebody with as much knowledge and awareness of the current market conditions as Shanna, and her excitement surely would quash any eventual disappointments we would encounter.
I began to email Shanna everything in the elusive $225,000 – $250,000 price range, but one unit caught my eye down on 80 Mill Street just east of Parliament.
Unit #911 at 80 Mill Street, priced at $249,000, was everything Shanna was looking for, and more! After weeks of emailing her borderline properties on the outskirts of downtown or in older buildings, 80 Mill Street energized our search and gave us some hope!
I went to preview the unit with another agent in my office, and we were both surprised by what we saw: a 1-bedroom-plus-den of 640 square feet parking and locker included, and dirt-cheap maintenance fees of $290/month including ALL utilities.
The unit faced north from the 9th floor with a clear city view, and of course, 80 Mill Street is a half block from the entrance to the Distillery District, which has become one of the more popular locations for restaurants, shopping, and nightlife—especially in the summer!
While Shanna and Quinn weren’t quite ready to purchase yet, this unit would serve as a glimmer of hope for them once they do become active buyers.
Shanna was delighted to see the listing for Unit #911 at 80 Mill Street hit her inbox on Tuesday morning, and she told me that this building was actually on her short-list of favorites. I could feel her excitement through the email, and I told her that if this was any indication, we wouldn’t have as tough a time finding her a place as I thought.
Now all the while, I was thinking that with the subsequent holdback on offers for this unit at 80 Mill Street, there was a good chance it would achieve a sale price over the asking. I figured that while not as many people are interested in the Distillery as there should be, there could be a few buyers for this property and it might get a small premium, say $7,000-$10,000 or so. I figured that a sale price of maybe $258,000 would still make Shanna feel confident, and they might even be able to stretch their budget to accommodate the premium.
Thursday afternoon, I called Coldwell Banker Realty to inquire as to the sales price.
I was shocked when I heard.
I knew the unit was good—I knew the unit was great.
But NEVER did I think that Unit #911 would sell for an unfathomable $300,000!
I literally sat at my desk, staring at the photos of 80 Mill Street for a good five minutes. I just couldn’t comprehend what was happening in our marketplace!
Bottom line: there is a severe shortage of listings on the market. Buyers vastly outnumber sellers, and “quality” properties are flying off the shelves.
Buyers are worried, nervous, and tired. They see something that they want, and they are willing to buy it at almost any cost.
Multiple offer scenarios used to be rare with condominiums, but now even the garbage properties are attracting two or more buyers, and even a crummy property at $279,000 that used to sit for weeks is starting to sell for $281,500 with two offers.
As volatile as the equity markets are in Canada and The United States, holding individual stocks in your portfolio isn’t nearly as scary a thought as being a buyer in today’s Toronto real estate market.
But what the heck is the alternative?