Sorry to disappoint…..but I’m not talking about the popular website where men and women with extremely low self-esteem post their photos for complete strangers to rate their sexiness out of ten.

I’m talking about real estate and what is hot in Toronto right now.  And I suppose while we’re at it, what is not…

A friend of mine, who happens to read this blog and comment frequently, told me a year ago that he was a “nine-point-two.”  I asked him what that meant, and he said, “Yaw man, u gotta get wit hot-or-not?  I get mad digits off that racket.”

For those of you who haven’t seen “Swingers,” my friend is saying that he meets and subsequently woo’s females and obtains their phone numbers for consensual, adult co-mingling, also known as “dating.”

I had yet to visit the “popular” website, but when I had the idea for a blog post on what is hot and what is not in the world of Toronto real estate, I thought I’d play off the name.  I visited the website for the first time, and suddenly I felt a lot better about myself…

Anyways…

So what is hot, and what is not in the world of Toronto real estate?

HOT

1) 1-Bedroom condos under $240,000

I’m not talking about bachelor condos here, or bachelor condos cleverly disguised as one-bedrooms (of which there are many!).  I’m talking about true 1-bedroom condos, ie. condos with an actual WALL that separates the sleeping quarters from the living space.

Sorry, but this does not qualify as a “bedroom”:

This is a bed next to the front door of the unit, and certainly not a bedroom!

1-bedroom condos in downtown Toronto seem to start around $220,000, but these always come with an asterisk of some sort.  Either they are borderline 1-bedrooms, the kitchen is essentially the living room (your couch is next to your stove), or they are on the 3rd floor of a unit overlooking the Gardiner Expressway.

$239,900 seems to be the popular price for a “great” entry-level unit, and these condos are flying off the shelves.

I had a client out West that was shopping for a condo in the $225,000 – $240,000 range and every time I sent him a new listing, it was sold the next day.  We finally found a unit for $242,000 that received five offers, and we got it for $246,000.

Everybody wants to own where they live these days, and entry-level one-bedrooms are the answer for those that can barely afford to get out of the rental rut.  It goes without saying that there simply isn’t enough inventory to satisfy the massive demand.

2) Downtown Houses – $450,000 – $600,000

I suppose I could have said “under $600,000,” but you really can’t find a decent HOUSE for under $450,000 in the downtown core anymore.  There are some houses downtown that can be had be had for $350,000, like this one…

I actually inspected this house in person, and not only is it on a 25 x 50 foot lot, but it looks like the big-bad-wolf could huff and puff and blow it over.  The interior is about 600 square feet, with no basement, and is likely full of problems.  It’s also in a “questionable” area.

So if you want a house in the downtown core, you’re looking at $450,000 and up.

A few weeks ago, a semi-detached house on Lippincott hit the market for $595,000 and everybody in my office knew it would be a war.  The house was completely renovated by a professional designer, and the location (two blocks from College) was prime.  There were eight offers, and the house sold for 112% of the list price.

You want to live downtown, but you don’t want a condo.

You want 1200+ square feet, and you don’t want to renovate.

You’re going to be in competition, and you’re going to pay over-asking…

3) Duplexes or Income-Generating Properties

Do these ever really fall out of favor?

For every buyer who wants a house but can’t quite afford it, a duplex is the answer!  Picture a 2-storey detached or semi-detached house with a self-contained apartment in the basement.  As a buyer/owner/landlord, you can live your dream in your two-storey house while collecting $800 – $1100 in rent from the basement apartment to help pay off the mortgage.

I had a buyer lined up for a duplex on Dupont, listed at $309,000, but before we could even get an appointment for the house, it sold for $320,000 – a price I think is likely $15,000 – $25,000 under what it could have sold for.

I crunched the numbers with my client, and we identified that it would cost him substantially less to live in this house with a tenant than it would to purchase an entry-level condo for $240,000.

Condos and houses offer completely different lifestyles, and some people just aren’t ready for condo life or want to skip it altogether.  A small house with a self-contained basement apartment or a duplex would offer the freehold lifestyle at an affordable price.

There have also been some three-storey triplexes that have sold very quickly.  For the owner/occupier who wants to essentially live for free, these properties can bring in enough income (with a decent downpayment) to keep the carrying cost negligible for the owner.

NOT

What isn’t hot these days?

1)  Houses over $3,000,000

The stats actually show that the market for houses over $1,500,000 is non-existent, but take that a step further and you’ll have some idea of what the market is like for those $3 Million properties that aren’t moving, and have significantly declined in value over the past 18 months.

I’d hate to be a builder holding inventory right now!

Imagine paying $3,000,000 for a house to tear down, spending $1,500,000 to build a new mansion, and then trying to sell it for $6 Million.  Builders of “luxury” homes are losing their shirts right now, and while the market is better today than it was in February, I still don’t see a lot of this product moving.

2) $700,000 – $900,000 Condos

Sure, it’s a lifestyle decision, but I think that most people who can afford a $700,000 property would probably look at houses first.

There are so many condos in the $700,000+ range, and I don’t know who is buying them all.

People who have the money for true luxury will be seeking $1,000,000, partly so they can say “I own a million-dollar condo,” but also because that’s the space they’re looking for.  The $700,000 – $900,000 units are certainly a step up from the $500,000, 2-bedroom condos, but they aren’t quite la creme de la creme.

3) High End Rentals

Some agents may disagree with me here, as there are some job transfer clients who are looking for that elusive $13,500 per month rental, but with the economy the way it is right now, I don’t see a lot of Fortune-500 companies dolling out $10,000+ for their execs to live the lavish life.

This is also a function of point #1 above – the glut of $6,000,000 houses that builders have constructed and can’t sell has led to every builder trying to lease the houses while they hope and pray that the market recovers.

It’s supply & demand, and there certainly are more luxury homes than there are families to rent them!