I like to think I have an awesome relationship with my blog readers.

Sure, we may not all agree, all the time.  But I’m blessed with a loyal following of astute, informed individuals, who add to the blog every day with their own insights and comments.

I’ve said this, time and time again – if you read the comments on the National Post, Globe & Mail, or whichever newspapers still have the guts to allow people to post, you’ll regularly see, as my mother calls it “the great unwashed.”  Some of these comments are just so ridiculous, you can’t believe that there’s a person behind the keyboard, with fingers that typed them in the first place.

On TRB, I rarely ever see a comment that looks like it belongs in the dregs of the Toronto Sun or Toronto Star comment section.

I’ve often said that without the comments from readers, my blog would be exactly half as interesting.  Maybe less.

Sure, I get trolled from time to time.  But doesn’t that make the blog more interesting?

Would it surprise you to know that many of the photos and captions from “MLS Musings” come from readers?  It’s true.  I would say at least twice per day, every day, I get emails from readers with stories from open houses, funny photos they took inside a house, listings worth of MLS Musings, or ideas for blog posts.

This week was a grind, I tell ya.

I got home just before midnight on both Tuesday and Wednesday, and while I love to say that I love the work, it’s tiring.  I try to have the mindset of an investment banker who lives at work and visits home, then asks for more, but I feel like a bum compared to those guys.

On Thursday, all I wanted to do was come home and have enough time to watch my PVR of Thursday Night Football, since I have Cam Newton in my football pool and I want to watch him play.  But faced with a solid two or three hours of work that needs to be done, and a blog post to write, I knew it wasn’t in the cards.

I started checking my email, and low and behold, an email from a regular blog reader named Ed.

The subject line?

“BLOG POST”

Ed sent me a note about a property that has been listed in his area for over two years.  Off and on, for sale and for lease, at a multitude of prices.

We’ve done this blog post before many times.

And a lot of the buzz last week was an article that John Pasalis, of Realosophy fame, wrote:

“Toronto Condo Listed 70 Times On The Market Over Six Years – Without Selling”

There’s no catch here.  The headline is accurate.

The property that Ed mentioned was different, since it was first put on the market at a very odd time, and now might be stigmatized.

So here we have the intersection of four very interesting real estate phenomenon’s: 1) Speculation, 2) The 2017 market peak, 3) Over-valuating one’s own home, 4) Stigma.

Thanks to Ed for the idea for this blog post on a night when I really didn’t have anything to write about, and thanks for the continued emails from blog readers.

Let’s start from the beginning…

“The property,” which is as specific as I’ll get in this case, was first sold in March of 2011 for $625,000

It was a detached bungalow on a 38 x 149 foot lot on a street where most properties aren’t on lots this large, but where they’re not uncommon.

Listed at $525,000, there was an offer date set for the property, but it sold with a bully offer on the first day for $625,000.

Imagine that?  Bully offers back in 2011.  I can barely remember last year…

The description on the listing read:

****Detached Home On Very Large Treed Fenced Lot. ****Ideal For Renovator/Developer + Attic Potential****

Nothing in this listing talked about sub-dividing the lot, but rather things like “attic potential” were mentioned.

The original buyer clearly had some foresight, however, as the property was, in fact, subdivided.

The property appeared back on MLS in October of 2011 for $850,000 with the following description in the listing:

Great Opportunity In Bloor West Village Area!!Property Being Sold As ‘Two Severed Land Only!’ Great Opportunity For Investors/Developers To Build Two Semi Detached Homes With 4 Units, Or Let The Seller Build You A Custom Home Of Your Dreams!

Now to be quite honest, I don’t know what “two severed land only” means.

I think it means that the lots were successfully severed, otherwise I have no idea why a $625,000 property in May would be up for $850,000 in October.

The property sat on the market for 135 days.

“Part 1” of the property was listed on MLS for $425,000 in May of 2011, then again in August of 2011.

In October of 2012, the property was sold privately, off MLS, for $384,100 which you would only find if you looked in Public Records.

Now assuming that the other “part” of this lot was sold for a similar price, the owner hauled in $768,200, which is a nice profit on the $625,000 he paid in 2011.  Buy a house, submit some paperwork to the city for a severance, and make some coin.  Not bad.

In February of 2013, the new owners put the house on the sub-divided lot up for lease for $1,950.  Think about that for a moment: a house that was originally sold as “land value,” was being offered for lease two years later, after the property was subdivided (I envision a line going through the centre of the house…).

And the best part?  The house may have leased for $2,050, but they were only asking $1,950.

Uh-oh!

“Bidding war on a house that’s merely “land value,” rotting away on a sub-divided lot!”

Now let’s fast-forward to 2017.

A beautiful new home on the lot – a semi-detached, 2-storey, 3-bed, 5-bath, with a detached garage, is offered for a staggering $2,100,000.

Now does anybody need a refresher of what happened in 2017?

Prices shot up like a rocket in January, through February, and into March, and then after the Liberal government made a few announcements in front of a podium, the market cooled, then fell?

Yes, we all remember.

So in what month was this house listed?

May.

Could there have been a worse time for this years-in-the-making project to come to fruition?

The house remained on the market for 43 days, well into July, before the listing was terminated.

And guess what the owners did?

They leased it!

Faced with a decision: drop the price and sell, potentially at a loss, or try to bail water from the boat as fast as they could, and avoid sinking, the owners chose the latter option.

They leased the house for $3,350/month, which, I have to say, seems really low for a brand-new, 3-bed, 5-bath home in a prime Toronto neighbourhood!

Rather than wait until the tenants left, however, the owners listed the property the following May, in 2018, for $1,998,000.

Showing the property with tenants living in the house, requiring 24 hours’ notice, not having the house staged, etc., probably wasn’t the best way to showcase the home, but to each, their own.

Only 20 days later, that listing was terminated, and the house was re-listed at the sexy new price of $1,799,800.

Was that price real?  Or were they looking to “price low, hold back offers?”

Well, it seems that rock-bottom price, which was $200,000 below where they were priced one month earlier, and $300,000 below where they were priced the year before, was, in fact, a “real price.”

How do we know?

Because the “price low, hold back offers” strategy came next, when the house was listed for…………….wait for it………………..$1,399,900.

Did it work?

No.

They came back out again at $1,725,000 thereafter, which now brought us into June of 2018.

Another listing at $1,725,000 followed in August.

Then one at $1,699,000 in September.

Then faced with the same decision they’d had before: sell and potentially lose money, or keep the property longer, and try to wait out the market, they made the only obvious choice…

….they leased it again!

This time they got $5,450.  Not bad for a year later, right?

Well folks, that brings us full circle.  Because here we are, one year after that listing, and the property is up on the market again.

What price?

$1,749,000.

And yes, it’s still tenanted.  You’d still need 24 hours’ notice for showings, the MLS photos are still from 2017, and you’d still have to wait out the end of the lease if you wanted to buy the house today.

While this house can’t hold a candle to the condo that John Pasalis described in the article above, that had been listed 70 times, I have to think that ten listings, for lease and sale, in 2 1/2 years, from $2,100,000 down to $1,699,000, has to earn a silver medal.

This is the very definition of “chasing the market,” and I thought the photo of two dogs above was appropriate for the post.

On the one hand, I commend these builder/investor/owners for sticking it out, and for all the work they’ve put into this venture.

On the other hand, I have cut losses many times in my life, and I don’t know that I’d have followed the same path if I were in their position, especially if this property was leveraged, which I am approximately 100.00% certain that it is.

The term “chasing the market,” for the most part, has been used in the past decade to describe people who continue to wait, often in failed hopes of the market going down, only to see it continue to rise, faster than their incomes, and get further and further out of reach.

I’ve seen people do this before, and I’ve seen people get priced out.  It’s tough to swallow when that unit you passed up on last year for $599,900 just sold, two floors up, for $655,000, and you’re still renting, and “saving.”

But in the case we just examined above, it’s a completely different kind of chase.

The market went up, way up, down, way down, sideways, up, back, forth, all over, and then up again, and they still haven’t sold.

They’ve had not one, but two tenants, and multiple listings in between.

They’ve tried to sell the property vacant, they’ve tried to sell it occupied, and they’ve tried listing high, and listing low.

If that’s not “chasing the market,” then I don’t know what is.

Thanks for reading, have a great weekend, everybody!