The houses that don’t sell
Posted on May 16, 2014 in Mortgage Market Updates and NewsEven in Toronto’s hot housing market, buyers aren’t always buying it.
By: Susan Pigg Business Reporter
Two weeks from now, Bryce and Ashlee Collins are likely to be the terrified owners of two homes.
One is the three-bedroom Etobicoke backsplit — “our forever home” — they bought last month and where they plan to raise their six-month-old son, Ben.
The other is the detached house they’ve renovated over the last four years in up-and-coming Little Portugal, near Lansdowne Ave. and Dundas St. W.
It’s been on the market for a month now without an offer.
“My wife and I consider ourselves somewhat knowledgeable about the real estate market, but we were not mentally prepared for this,” says Bryce, 38.
“All you hear about are the bidding wars but, as two agents have said to us: ‘You never hear about the houses that do not sell.’”
The Collins are panicked, living proof of the vagaries of the Toronto real estate market. They are also a cautionary tale that things don’t always go as you would expect, even in the hot 416 region where it can be far more difficult to find a house than to sell one, given the persistent shortage of for sale listings and the growing demand to live close to the core.
It’s as if the Collins’ three-bedroom, 118-year-old house on a quiet street just steps from the burgeoning bars and restaurants of Dundas and Queen St. W., has disappeared from the radar, even as semi-detached homes nearby have drawn multiple offers and gone for well over asking.
Realtor Elaine Mok is so perplexed, she asked a half-dozen colleagues to do a case study on the house, which she listed for $750,000 on April 9, based on the fact the more updated, but otherwise identical, neighbour sold for $809,000 last fall.
They agreed it was priced and marketed properly, although the Collins have since dropped the price to $729,000.
“When we started, it was fun. We packed up all the baby’s toys. We sent the dog to my parents’ house because he sheds.
“We thought he’d be back in four days. He was there for two weeks,” says Bryce, who has also sold a condo and a townhouse over the years, and never seen anything like this.
House hunters have commented that the two-car parking doesn’t come with a garage, the basement is unfinished and there is no basement apartment.
Beach realtor Rick DeClute is seeing the same thing at his listing on prime Leuty Avenue — a detached home, just five houses from the water that hasn’t had an offer in two weeks.
(In fairness, the average time on market for GTA properties, including condos, is about 20 days, although generally less in the 416 region.)
Even some online posters — the house was featured as blogto.com’s House of the Week — see it as a bit of a bargain at $1.5 million in a market where the average sale price of a now approaching $1 million detached.
“I guess it’s the HGTV thing: Everybody wants everything done. It could use a new kitchen. But you can throw a stone and hit a house nearby that sold (with a direct lake view) for $2.5 million,” says DeClute.
While multiple bids aren’t letting up, there is growing buyer fatigue, says realtor David Fleming. That’s only adding to the unpredictability in the 416 market, in particular: buyers who are walking away from houses they feel could attract multiple offers or, in a strange twist, walking away if there aren’t multiple offers, fearing that’s a sign that “something is wrong.”
DeClute offers one simple bit of advice to clients, even in a hot market, struggling with the age-old question: Is it best to sell or buy first?
The owner of the Leuty house agreed, is prepared to wait as long as it takes, and has yet to buy another home.
“The risk if you sell first is that you don’t find the ideal place is that you have to rent for a while, but you are able to shop with money in your pocket and you are in the drivers’ seat.
“The alternative is that if anything happens and you can’t sell, you can find yourself with your back against the wall and be forced to reduce your price, usually by about 10 per cent.
“In this case, that would be $100,000.”