I’m not looking to knock these buildings, but I am looking to have an unbiased, open discussion about supply and demand, and the staggering number of units available for sale in this complex.
If you happen to live here, it’s not personal. Feel free to join the debate.
Just don’t shoot the messenger…
I remember back in the summer of 2010, I was relaxing in Idaho, and an idea for a blog post came to mind: what if I went through thousands of available condo listings on MLS and found the buildings with the most properties for sale, as a percentage of the building?
What were the most over-saturated condos in Toronto?
It was one of the greatest ideas I’d ever had for a blog post, and it took me hours and hours to comb through the data.
I then listed off the “Five Most Over-Saturated Condos in Toronto,” and the Sh!t hit the fan.
Check out the blog if you have time – both the post and the comments. HERE.
I lost a LOT of readers with that post, but that’s okay.
The overall intelligence level and knowledge of real estate of 2013’s TRB blog reader is far greater than that of 2010. Anybody living in one of the buildings I mentioned was NOT a happy camper, and a lot of readers posted that they would never read my blog again. There were some crazy comments, I’ll tell ya! One girl said, “Your blog should immediately be shut down!” I rarely respond to idiocy, but I couldn’t help but fire back, “Shut down by who? The ‘world police?’ Have a nice day.”
Man, the assault was relentless! People were attacking me personally and professionally, but more of the former, and the odd comment about my physical attractiveness (or lack thereof) even made its way into the comments!
People were pointing out (as if I was somehow unaware, or hiding the fact…) that “New buildings always have lots of units available,” but that didn’t seem to negate the fact that 20% of some of these buildings were for sale, and that this wasn’t a good thing!
It’s like somebody saying, “There was another 13-person massacre in the United States? Ah, that’s okay – this happens all the time, so it’s okay.”
Anyways, I find it somewhat ironic that one of the buildings on that list from years ago would STILL be on a short-list of buildings with a high percentage of available condos today.
Not that I keep track of what goes on at “Neptune,” but the other day, a reader emailed me this:
“Hi David, I’m just curious if you know of some catastrophic problem at 209-215 Fort York Blvd that would explain why there are always so many units for sale there. There’s like thirty or forty for sale right now and I don’t understand why. I have to think there’s a problem with the building? Or like a big assessment pending? Anyways, love the blog and keep up the great work! Tx! D.”
Like I said before – I don’t keep track of what goes on at Neptune. I’ve only been in there a handful of times, and I’ve never sold in there. We can debate the merits of living on Fort York another time.
But the reader’s email made me curious, and so I searched “Fort York” on MLS.
Do you know how many results came up?
75.
Eliminating 15 Fort York Boulevard, which is really part of the CityPlace complex at Spadina/Bremner, and 169 Fort York, I found there were still sixty-one results for condos at 209, 215, 219, and 231 Fort York.
Then removing 219 and 231 Fort York, I found between Neptune and Neptune II at 209 and 215 Fort York, there were forty-four units for sale.
Forty-four.
That’s a lot, isn’t it?
2010’s blog commenters might have said, “No, that’s not a lot! There’s a building in CHINA that has 84 units for sale! So shut your big mouth, David!”
But as I’ve seen over the past two years, my blog readers, both bullish and bearish on real estate, have cooler heads than years’ past. So can we talk about how 44 units for sale at 209-215 Fort York Boulevard – a 3-year old building, is not a good thing?
When I did my video on the new West Don Lands development last week, the point I wanted to make was that if 18 condos were all built at the same time, and 10% of each building was put on the resale market after the buildings were completed, we could see a thousand units for sale at the same time!
Sure, these buildings aren’t all the same project, aren’t the same developers, won’t be ready on the same day, etc. But the point is still there: over-saturation affects price.
In the case of 209-215 Fort York Boulevard, the market has had ample time to soak up the available inventory – three years, in fact.
And yet there are still 27 units for sale at 209 Fort York, and 17 for sale at 215 Fort York.
Doesn’t this have to affect price?
Let’s say you own a 1-bed, 1-bath in this complex, and you’re looking to list it on the open market.
Currently, there are SIX 1-bed units, and ELEVEN 1-plus-dens.
If you were a seller, wouldn’t this make you feel a bit sick?
I mean, if you were standing at the side of the road selling bags of oranges, sales could be hit or miss. But if nine other people came and stood next to you, also with bags of oranges, clearly you’d have less sales, or have to drop your price drastically to sell your oranges.
Now this analogy only goes so far, but you’d have to agree that competing against 1-2 units in your building means buyers have choice, but competing against 10-15 means you have absolutely zero leverage.
The theme doesn’t change with the 2-bedroom units either. There are TWENTY 2-bedroom units for sale at Neptune 1 & 2, which gives a buyer a ridiculous amount of leverage and room to negotiate.
In complete contrast, a new unit came onto the market at 205 Frederick Street yesterday, and I jumped on it. I had a client interested in the building, and we saw it last night – only hours after it came out. This unit was a 1-plus-den, 1-bath, with parking and locker, over 800 square feet. Do you know how many other 1-plus-den, 1-bath, with parking and locker, over 800 square feet units there were for sale in the building?
Zero.
That’s the point I’m trying to make today.
I wonder what is going to happen down the road, if and when buildings have so much inventory for sale that the market just can’t handle it.
I’m sure that 209-215 Fort York is a “great building” for those people that live there, and I don’t have anything negative to say about this building, at the moment. But the fact that there are 44 units for sale is alarming, to say the least, and if a seller were to say, “I’m not worried,” they’d either be lying, or they’d have no basic understanding of something called “Supply And Demand.”
There are currently two units for sale at Quad Lofts at 19 Brant Street.
There is currently one unit for sale at Robert Watson Lofts at 369 Sorauren Avenue.
There are currently two units for sale at East Lofts at 138 Princess Street.
There are currently five units for sale at Pure Spirit at 33 Mill Street.
And the list goes on.
And on.
There’s a reason that popular buildings, with great reviews, and happy owners, aren’t saturated with units. I’m going to go out on a limb and say that Neptune has a LOT of investor-owned units, and Quad Lofts does not.
I caution buyers against purchasing into buildings where 44 units are available for sale, since it speaks volumes about the existing ownership, and the potential resale value down the road.
I’m not saying that if a unit comes out in a building with NOTHING available, that you should jump into a bidding war for it.
But I am saying that for a buyer, there has to be a happy medium between a “good deal” and “way too good a deal.”
And as for the absorption of inventory, time will tell.
But people are crazy to think that over-supply won’t have a downward affect on pricing, and personally, I think buyers will begin to shy away from projects that are expected to be primarily investor-owned…
Paully
at 9:07 am
David, any thoughts on what the “average” percentage of investor-owned condo units is in Toronto? Do you have a suggested percentage that you would advise potential owners to avoid?
Our condo in Willowdale never had over 25% of the units rented over all of the years that we lived there, and I always figured that it was a good, relatively-low number.
DavidP
at 12:01 pm
I think the problem with Fort York is not so much that it was primarily bought by investors, but that the developers in that entire neighborhood neglected to make interesting retail space or attract different types of stores or propose transit alternatives like bike lanes when developing (especially because it literally was a blank slate before they came along). It’s no secret that transit development in Toronto takes decades, so bike lanes and Bixi support could’ve helped soften the distance these projects were from efficient transit. (Streetcars don’t count.) Instead of faceless floor-to-ceiling glass stores with no signage or unattractive ground floor condo units, they could’ve mixed up storefront designs (like the Jazz rental building at Church/Shuter) or lured interesting lifestyle business partnerships like bowling alleys, rock climbing gyms, etc that need spaces that are essentially designed for them. It’s too much like an inconvenient bedroom suburb à la Milton within downtown Toronto for end-user owners.
Frito Bandito
at 12:01 pm
On the small piece of land bordered by Bathurst, Fleet and Fort York there are at least 9 major condos either built or now under construction. I don’t think it’s something wrong with the Fort York building(s) themselves (though I have no personal knowledge of them), but rather all those other developments you have to compete with. It’s probably better to get out now than to face even more competition down the road once all these units are finished.
On a side note, I think this piece of land is a prime example of this city not having any real master plan and allowing developers free reign to over-build/over-populate an area without sufficient road and transit infrastructure in place to handle the amount of residents that will eventually be living there. Not to mention that the island airport is a stone’s throw away, further complicating the congestion for anyone trying to access lower Bathurst during rush hour.
Tracey
at 1:00 pm
David, I believe this is the area that has a condo wedged beside the Gardiner. I was shocked to see units facing out under the elevated highway. They have no light. That would make for a great video
AndrewB
at 2:13 am
While reading this blog entry I immediately thought about these particular buildings (the one particular with the black and white checkered side). At the right level, it looks like you can literally jump off the south-facing unit balconies and land on the Gardiner.
Joe Q
at 12:28 am
I’ve always thought those folks could make a killing selling hot dogs and canned pop to people stuck in traffic on the Gardiner.
George
at 10:02 pm
It’s too bad they went with faceless high rises instead of midrises, townhouses, and a mix of parkland. Now it’s just one big oversaturated concrete garden of towers which offers its residents very little in the way of positive neighbourhood identity and beautiful landmarks. It’s the condo equivalent of faceless subdivisions/suburbs. Rush needs to make a song about it.
Philip
at 10:52 pm
I was very close to buying a unit at 209 Fort York recently..until I received the status certificate. *AT LEAST* 80% of the units are rentals…
Not good news for me who was going to live in it for a few years. I would stay away from this building.
Susanne
at 8:15 pm
I think Philip hit the nail on the head. It’s a rental complex. Many people living in the units are renting, and there is a very high turnover rate. I have been living here almost 4 years and I believe there is only one other person on my floor that has been here for at least 3. The unit across from me has been rented to 4-5 different renters during this time, one of them ending in eviction. It’s too bad because it’s a great place and a good location.
Noware
at 1:56 am
Call me crazy but I think buying a condo in a neighbourhood that has little to offer in terms of shopping and other retail space, the ugly-ass Gardiner Expressway, and the equally ugly train tracks is a great investment for the following reasons:
1. One day someone in City Hall with some ‘vision’ will tear down the Gardiner and put something (hopefully a park) in its place.
2. That same someone (or someone with equally great ‘vision’) will cover up those train tracks with a roof of some sort and put something on top of it (hopefully a park).
3. Tearing down the Gardiner Expressway and covering the train tracks will open up plenty of space for shopping districts and other retail space, thus increasing the value of the condos in the vicinity.
In conclusion, I feel buying a condo around Fort York is a good idea if you’re willing and able to hold on to it until someone at City Hall realizes the potential of tearing down the Gardiner and covering up the train tracks – two things I feel are inevitable.
rob
at 12:23 pm
the gardiner, albeit a terrible eyesore cannot be torn down. that would be considered dillusional, not a vision from city hall. mainly because the congestion. if cars could fly like movies from the futre the teardown may be practical, but without another highway of some sort in its place, it would be putting the city backwards not forwards. could you imagine the traffic on lakeshore?
Patrick
at 2:27 am
I own a unit in 209. I love the building. Love it that I am close to the hwy but also close to the streetcar and the downtown core. A huge park and lake across the street. Only bad thing is that there is no big grocery stores near by (walking distance) like a Lobaws or NoFrills and there is no restaurants in walking distance. unless you want to walk to Bathurst to get a Subway sandwich. In 2008 when I bought the place my shady real estate agent told me that there was going to be a Loblaws built near by 🙁 Anyways…. I bought my unit preconstruction in 08 for $300k with parking.. now I say its worth less than $350k. Not the best investment… I should have bought at 1 Bedford instead. But I love the area and soon I feel when all the condos near by are built the price will go up substantially.
Aamir
at 12:18 am
Hey guys I need some advise I am looking to buy a condo at 209 fort york for my family, is this a good place to be. Please advise
Thanks
Aamir
at 12:19 am
Aamir
Hey guys I need some advise I am looking to buy a condo at 209 fort york for my family, is this a good place to be. Please advise
Thanks
January 19, 2017 at 12:18 am
James D
at 3:29 pm
Fast forward to 2018 and the place is being managed by Maple Ridge, one of the worst PM companies in Toronto! The manager there now is an incompetent old lady in way over her head