Are You “Location-Agnostic?”

Opinion

8 minute read

August 17, 2020

If there’s one thing 2020 has given those of us who work in real estate, it’s a lot of new things.

New challenges, for sure.  New experiences, absolutely.  New systems and processes, yes.  And with respect to buyers and sellers themselves, new real estate criteria.

I can’t tell you how many times, so far this year, I’ve used the term, “…..for the first time in my career,” in a sentence.  Over and over, I continually see new things, and I have to think much of this stems from the pandemic.

New values are being placed on buyers’ searches every day.  The “work from home” movement has changed a lot of buyers’ criteria, as many are electing to move out of the city now that they don’t need to travel to a physical office.  At the same time, many are realizing that their homes are too small, and are buying up.

If the pandemic was supposed to slow down the real estate market, or for us Realtors, slow down our business, I haven’t seen it.  Yes, April was dead slow.  I completed only two transactions in that month, which is a month where I’ll historically write ten or twelve deals.  But since then, the proverbial phone has been ringing off the hook, and most of the business is, in some way, pandemic-driven.

The most common theme among these phone calls is that people need more space, different space, or a different location.  All of these are a result of the pandemic.

“Angus and I are both working from home, and we have both kids here with us.  We’re living on top of each other, and we can’t do this in a 3-bedroom, 2-bathroom house any longer.”

Save for the name, that’s word-for-word what one long-time client told me.  And whether they both go back to work, or whether the kids go back to daycare, they are choosing now as the time to buy a larger home.

“Lisa and I realize that, having been renting a one-bedroom condo for two years now, and living here for every waking moment during the pandemic, we really should be looking at buying a house.”

This is what one renter told me three months ago, and they just purchased a house last week.  The days of both renting and living in six-hundred square feet are soon to be over.

I could provide another half-dozen examples, but I think you get the point.  An overwhelming majority of my business at this very moment was shaped, in some part, by the pandemic.

There’s another trend, however, that I find even more interesting, and this too is shaped by the pandemic.

If you read the title of today’s post then you know where this is going.

Many of my buyers right now are “location-agnostic.”  That means, essentially, they don’t care where they live.

I’ve always had this rudimentary little “real estate equation,” as I call it, that I provide to my buyer-clients when we first start chatting:

A + B = C

Remember this from school?

So those three variables are, in no particular order: property, price, and location.

Just as we learned back in school, if two are provided for you, then you can solve for the third.

A = property
B= price

Then “C” equals location, and if your property is a 4-bed, 4-bath, new-build on a 30-foot frontage, and your price is $1,900,000, then solve for location.  Where can you get a 4-bed, 4-bath, new build on a 30-foot frontage for $1.9M?  How about Alderwood?  East York?  Not Leaside, not Wanless Park, not Allenby.  Define the property and the price, and the location will be solved for.

What if:

A = Location
B = Price

Then “C” equals property, so if your location is Leaside, and your price is $1,800,000, then you can get a detached, 3-bed, 2-bath on a 28-30 foot lot, with an original footprint, but no renovation.  You’re above the $1.4M semi-detached, but well below the $2.4M, 12-year-old custom homes, not to mention the $2.6M new-builds.  Define the location and price, and the property is solved for.

What if:

A = Property
B = Location

Then “C” equals price, so if you want to live in a particular neighbourhood, say, The Kingsway, and you want a brand-new, 4-5 bedroom, 6-bathroom on a 50 x 150 foot lot, with all the bells and whistles, then solve for price, which in this case, is likely over $5,000,000.

As I tell my clients, it’s almost certain that price is going to be one of your two “provided” criteria.  Most buyers have a price cap, do they not?  So while some buyers want to buy for $800,000 but can stretch to $900,000, it’s not as though most buyers are price-agnostic.

Ultimately, the search will come down to choosing what is more important: property or location?

And for the bulk of my time in this business, it’s location first and foremost.

A client will say, “We’re looking in Riverdale, and we’re pre-approved for $1,500,000,” and it’s my job to explain that they’re looking at semi-detached, not detached, likely 3-bedroom, and not 4-bedroom, likely lane parking and not front pad or private drive, etc., etc.

Location trumps property-type, every time.

Or, that is, until recently…

I have an offer that’s live, as we speak, for a property in Clanton Park.  But the clients have looked in Bathurst Manor, Lawrence Manor, Ledbury Park, Willowdale, Newtonbrook, and………wait for it……………Thornhill.

Why in the world have we looked in all of these very, very different areas?

Why have we seen houses as far south as Bathurst & Lawrence, but as far north as Bathurst and 407?

Well, because the clients are truly location-agnostic.

I mean, they don’t want to live in Barrie, and they aren’t looking in the Beaches, but you get the picture.

These people are more than just “flexible” on location.

I asked my clients, “Would you rather live in Thornhill, or in Bathurst Manor?”

I couldn’t get a straight answer, I swear.  There was literally zero preference.  It was as though I was giving them two sides of the exact same coin, and they refused to see it as anything but a nickel.

Believe it or not, this is challenging as an agent!  It’s tough to not over-advise.  There I am, standing in front of a house in Thornhill, that looks like every single other house on the street, on a “quiet crescent” that is just way, way too quiet, and who am I to ask, “Guys, why the HELL do you want live here?” when they see no difference between this pocket and, say, a house on Joicey Boulevard, just steps from Avenue Road?

For them, it was the house that was the deciding factor, and not the area.

This is something I’ve obviously seen before in my sixteen-plus years in the industry, but not to this extent, and certainly never as often as I’m seeing it now.

Another set of clients that I’m currently working with recently sent me the areas they’d consider:

Alderwood
Long Branch
Mimico
New Toronto
Eatonville
Norseman Heights
Queensway
The Kingsway
Sunnylea
Swansea
High Park
Bloor West Village
Roncesvalles

Right.

So, basically draw a box around Highway 427/Brown’s Line, Lake Ontario, Eglinton Avenue West, and Keele/Black Creek Road.

That’s a search radius of 58 square KM.

As I said – this goes way, way beyond merely “being flexible on location.”

This is truly location-agnostic, and it’s not until we start to look at search criteria that we can strip away some of these locations.

These clients have a budget of up to $2,300,000.  That keeps all of these areas on the list.

They want a detached house, at least four bedrooms, and a double-car garage is a must-have.-

You’re not seeing many double-car garages in Roncesvalles, and half of the housing stock are semi-detached.

The Kingsway is just way too expensive for what they want.

And when you factor in that they’re looking for at least a 40-foot frontage, then Bloor West Village, High Park, Swansea, and Sunnylea are likely out.

They don’t need a brand-new house, but something relatively new.

They want a nice “neighbourhood vibe,” and something that is established.

That might eliminate New Toronto, Mimico, and Long Branch, and since the new-builds that fit this criteria in Norseman Heights are over $3,000,000 (see what’s available on Van Dusen, Eagle, et al, I can’t believe it…), then we’re whittling down this list of areas even further.

While I’m sure that if you were playing along at home, you can find one or two houses in each of the areas I’ve eliminated that fit their criteria, we’re not looking for only one or two options, but rather we’re looking for an area where most of the houses fit this description so that, not only do we have choice, but we’re also not buying the worst or best house in the area.

When all was said and done, I identified that Eatonville was the best possible fit for them, with Alderwood as a Plan-B.

We went out last week and saw a few houses in the area bordered by 427, Rathburn, Bloor, and Kipling, and they loved it.

Exactly what they were looking for.

An abundance of 50+ foot lots, new and new(er) builds, large backyards, double-car garages, established communities, quiet streets, and tree-lined streets too!

Where we actually were, in the city of Toronto, mattered not.

Which quadrant of the city, if displayed on a map, was of little concern to them.

What mattered was simply the fact that this was an area in which they could get everything they wanted for the price they could afford.  Being location-agnostic didn’t just shape their search; it completely directed it.

Back in July, I started talking with an entry-level home-buyer who had a really tough budget: $800,000.  Once upon a time, this was a significant sum of money in Toronto, but in 2020, it’s really, really tough to break into the freehold market.

She said she “wasn’t fussed” on exactly where they were going to live, so long as it was really close to transit, as both she and her husband worked downtown.  They owned a car, but didn’t drive to work.  They had family out of town and drove every weekend, so needed parking, or at least, wanted it.  They had two small children but were okay with planting bunk-beds in one bedroom, at some point down the line, and would make do with a crib in the master bedroom for now.

She said they preferred east to west, and that they had lots of friends in The Beaches and along the Danforth.

In a perfect world, they’d be able to afford a 3-bedroom, and they would love something new(er), as they were not looking forward to doing any work on the home.

I showed her two options just for educational purposes:

1) 99 Newmarket Avenue
     Main & Danforth

Semi-Detached
2-Bed, 2-Bath
16 x 100 Foot Lot
No Parking
Built: 1910

East of Main Street is a bit “rougher” for most buyers, and this house is on the west side, so it’s a decent location.

The property has it’s limitations: it’s only a 2-bedroom, and there’s no owned parking of any type.  The lot is only 16-feet wide, which isn’t tiny in this area of the city, but it’s not huge either.  And the staircase runs perpendicular to the house itself, so it splits the main floor in two (ie. living at the front, then staircase separating living from dining/kitchen).

But it’s nicely updated inside, and this is steps to Danforth, and very close to TTC.

This sold for $825,000.

2) 2 Colinroy Street
     Port Union

Semi-Detached
3-Bed, 3-Bath
26.44 x 85 Foot Lot
Private Driveway, Built-In Garage
Built: 2000

All aboard!  The train to Port Union is leaving the station!

This complex was built anew in 2000, and this particular freehold property is an end-unit semi-detached on a wide 26-foot lot, with three beds, three baths (including the coveted master-ensuite), and there’s a built-in garage for one car, with the ability to park a second car on the driveway.

This house is literally a five-minute walk to the Rouge Hill GO Station.  A mere 450 meters.

This sold for $800,000.

How did my client respond?

Well, she asked, “Why in the world would anybody want to live in that tiny semi when they can get something like that newer house for $25,000 less?”

Oh, and the ironic part is: it would take less than a half-hour to get to work in the morning, living on Colinroy in Port Union.  A 5-minute walk, jump on the express-train to Union Station before 8am on weekdays, and voila!

The house on Newmarket Avenue is also a short jaunt to a Go Stations, specifically the Main GO, so that was a great transit option as well.  But think about, say, a small house up at O’Connor, and maybe at Greenwood Avenue: you’d be taking a bus down to a subway, then transferring subways at Bloor & Yonge, and it might take an hour to work.

The Port Union house provides as easy a commute as they come.

And it’s a newer house, larger lot, more square footage, a master ensuite, parking AND a garage, and a really cool little community.

For all this talk about people moving out of Toronto, we’re not talking about the people who are staying in Toronto, but focusing on areas and neighbourhoods that they previously might not have.

Location-agnostic buyers are representing about one-third of my buyer-clientele right now, whereas one year ago, they would have represented that unicorn that makes you tell your colleagues, “These guys are nuts, they don’t care where they live!”

Times change, and that is so true in 2020.

Value is now driving many buyers’ searches, rather than specific location.  This is a trend worth keeping an eye on…

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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26 Comments

  1. Elle O'lelle

    at 7:45 am

    What happens in six years when the pandemic is over? Are all of a sudden these people going to want to come back to the city?

    1. Graham

      at 9:11 am

      There ain’t no coming back. This is the really real world, there ain’t no coming back.

        1. Graham

          at 10:07 am

          You know it: https://youtu.be/OB8uD8FaPXU

          Abashed the devil stood and felt how awful goodness is…

          Monday morning Milton. Maybe a new blog feature.

  2. Appraiser

    at 8:28 am

    Interesting observations. The pandemic frightened / is still frightening many of us.

    Some have clearly decided that if they can survive this nightmare, nothing can scare them, not even a giant mortgage at 2% interest.

    So it’s time to pull the trigger and move up.

    As corroborating evidence, the latest MLS data for TRREB clearly indicates a big rise in sales over $2M over the past 2 months.

  3. hoob

    at 8:33 am

    I’ve lived in Bathurst Manor sector. Ugh. That’s all I have to say.

    1. TBD

      at 10:11 am

      Bathurst Manor is one of the best locations relative to the whole GTA. I guess it depends what you’re looking for though.

      1. hoob

        at 10:24 am

        Yeah that was my thinking when I moved there… It’s central to … everything… and has its own appeal as… almost nothing. A wasteland of post-war drab suburbia with zero real character of any sort.

        No I’m not a fan. Yes I realize it’s completely subjective.

        1. TBD

          at 10:40 am

          Some streets are nicer than others….I’ve lived here my whole life and enjoy seeing homes slowly being updated and the neighborhood transforming. It is subjective but you can’t beat the amount of land you get as well as convenience of location.
          Too bad you didn’t like it…but I get it’s not for everyone.

  4. TheRockies

    at 11:24 am

    My wife and I were in similar pool a couple of years ago. Young immigrant family with a kid and no relatives in Canada, buying for the first time. We had certain criteria, including budget (tight), proximity to transit, park(s), and shopping, established neighbourhood, and good school district. Completely location agnostic. However, after we reviewed a few neighbourhoods based on these criteria, it was easy to realise what would fit our needs. And I know a few other immigrants who bought like this.

  5. Diam

    at 1:05 pm

    I’m in the pool of those downtown looking to move to a bigger house as I will be WFH more often than not for the foreseeable future (and will persist, as COVID has shown WFH is actually very productive thanks to technology). Main consideration for me is lifestyle and space for my kids. Currently own a detached in the core.

    I’ve narrowed down to a few areas (Etobicoke, North York, Thornhill). I look daily at new listings in my price range and it’s very slim pickings. Staying put is not the worse thing, but downtown is changing (imho, for the worse) for families looking to raise young children.

    1. Bal

      at 5:51 pm

      Hold your horses Appraiser…their prediction will come true..lol

    2. Chris

      at 1:03 pm

      And the stock market is exhibiting the bull trap just as you predicted.

      1. Appraiser

        at 4:18 pm

        Weak.

        1. Chris

          at 4:27 pm

          Yet true.

  6. Fred

    at 9:11 am

    This was by far the most annoying, “Oh pity me” article I have read to date. I read halfway through and skipped right to the comments.

  7. Appraiser

    at 9:25 am

    LG reports unofficial mid-month TRREB sales data for August:

    Low-rise sales and prices up 54% and 18% respectively
    Condo sales and prices up 14% and 13% respectively

    Low-rise new listings up 35% and condo new listings up 89%. 1.3 MOI for low-rise and 2.2 MOI for condos right now

    https://twitter.com/JohnPasalis/status/1295464224542666752

  8. Marty

    at 3:17 pm

    This was a fun read.

  9. Kyle

    at 4:36 pm

    Curious David, how school factors into the location decision. I think if someone has or plans to have kids, school is going to limit how agnostic they can really be. I get that with more flexibility to WFH, some people will deprioritize the work commute, but school still requires a commute and location will determine the school district. Are there value priced neighbourhoods, with high ranked schools?

    1. Jimbo

      at 8:48 pm

      Private school for the win. Don’t need to worry about the school district.

    2. David Fleming

      at 10:33 pm

      @ Kyle

      This topic has been in my queue for a long time. I was thinking about it over the weekend, but the blog post I was writing in my head had far more to do with schools themselves than the intersection of schools and real estate.

      I’ll try to come back to this idea next week.

      I have a doozie for Wednesday! 🙂

      1. Kyle

        at 10:48 pm

        Looking forward to tomorrow’s as well as next week’s blogs.

  10. Tanvir

    at 2:45 pm

    Hey, we bought 2 Colinroy St.!

    1. peggy

      at 5:50 pm

      Congratulations!! I work near there and you are going to love that area!

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