<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=294326554740919&ev=PageView&noscript=1" /> Market Update - Wilson Sisters

Market Update

07 March 2015
Wilson Sisters

“This must be music to your ears,” came the message from an old friend the other day, referring to the news that the average price of a detached home in Toronto had surpassed a million dollars.

Not really.

Sure, it’s nice to know that the value of my home and those of our past clients are steadily heading upwards, but as Realtors who love working with first time home buyers, and whose clients from 5+ years ago would ideally be ready to move up to a bigger home now that they have house full of kids, it’s not exactly the best news. More and more, the people we talk to are telling us that they are staying put and making do with their outgrown space because they can’t afford to move to the next step. With the double land transfer tax here in Toronto, as well as the rapid increase of average purchase price, it’s just becoming more and more difficult for people to move. And less people moving means less inventory, against very high demand, hence higher and higher prices.

What does this mean for you?

First Time Home Buyers

Already this year we have seen a fairly significant increase in prices. Clients of ours looking for homes late in the Fall around the half million mark watched themselves be priced out of the market as we house hunted. When we started, their price range was do-able, but faster than they could make a decision it was taken out of their hands. Homes needing extensive updates and in less than desirable locations, whether on a busy street, or backing onto train tracks, where last summer they may have languished on the market for a few weeks (a long time by Toronto standards), have been selling this year with 5+ offers for prices that had our clients’ heads spinning.

If your ideal purchase price is below $500,000, along with expanding search parameters into areas previously unconsidered, like great pockets of Scarborough, we do suggest condo shopping to our first timers as an affordable way to get into Toronto’s market. Selected carefully, there are still some solid investment opportunities in the Toronto condo market, and it can be a great way to get your foot in a door well worth opening. Condos may not see as quick of an increase in value as freehold homes in Toronto, but we have seen many clients build a pretty solid retirement plan through condo investment.

Builders have been paying close attention to the demands of buyers are including more three bedroom options in their buildings. We moved some clients into a three bedroom unit in The Distillery seven years ago, and they have been able to stay there through the addition of children to their family and a $150,000 increase in value in their home. Had they bought a house instead of a condo at that time, they would be sitting on more equity, but they’ve still done well, and they are now looking to make the leap to a detached home, with a decent down-payment.

Statistics taken from the Toronto MLS:

Freehold Homes (we chose east of downtown because it’s a popular and still moderately affordable choice for our first timers):

  • Since January 1, 2015 there have been 14 sales under $500,000 in E01, E02, and E03.
  • During the period from October 1, 2014 to December 31, 2014 there were 40 sales in the same area under $500,000.

Condos (we chose downtown because it’s the most popular choice for our first timers):

  • Since January 1, 2015 there have been 104 2+ bedroom condo sales in C08 and C01 under $500,000.
  • During the period from October 1, 2014 to December 31, 2014 there were 196 2+ bedroom sales in the same area.

The capital investment required for a first time home purchase is going up, possibly faster than some are able to save for their down payments and closing costs. Getting into the Toronto real estate market is a very worthwhile goal. Considering the condo market as a solid first step can be a great decision. Make sure you choose to work with a Realtor who knows the condo real estate market well and can guide you toward a building and home that will maximise your return. Give us a call if you’d like to discuss how we can help.

Thinking of Selling?

Your home may be worth a lot more than you think! Give us a call to discuss the value of your home and how we can help you make the most of it with our comprehensive marketing plan and staging. Now is the time.