Toronto’s housing market is as diverse as its people: ranging in price, size, and location. I pick a Toronto listing to focus on each week and review it with a professional's eye. What makes a house a great pick - and what makes it a pass?
OVER 60 DAYS ON MARKET - WHAT’S GOING ON?
This week we’re going to do things a little differently – instead of picking one home to highlight, we’re going to look at a few listings that seem to be anomalies in this heated market. We are constantly being bombarded with reports in the media saying we don’t have enough supply to meet demand, and that homes are selling within days of being listed for thousands of dollars over asking – so if this is true, then how are these houses still on the market after all this time?
To look into the causation I used a small sample area – the east end of Toronto, south of O’Connor and between the DVP on the west side, and Warden on the east. What I found was interesting – there are currently 10 listings in this area that have been on the market for over 60 days, and out of those, 7 are on busy streets or main roads.
The one I found most interesting was a listing on Kingston Rd located in the Upper Beach neighbourhood. Although the Upper Beach is typically a little less desirable than the Lower Beach due to various factors, such as: school rankings, prestige, and proximity to the water, overall we usually we see buyers clamouring over each other to get into these highly coveted neighbourhoods. To have a listing sitting on the market for over 60 days is one thing, but to have this same listing be located in this east end neighbourhood seems odd at best.
The other listings were located on Woodbine Ave, Danforth Ave, Gerrard St, Coxwell Ave, and Dundas St E – all high traffic areas, and busy streets. This begs the question: are these homes not selling due to their specific location, or are these homes overpriced compared to other houses selling on the same busy road? Typically, a house on a busy road should sell for less than the same house on a quieter street.
Let’s take this home on Kingston Rd for example. Interestingly enough, looking into the sales history on this house we can see that they have actually been trying to sell it since 2009:
Source: Realosophy.com - Realosophy PRO
Based on the previous sale price in 2008 of $285,000, and the current list price of $799,000, the appreciation for this home in the 8 year period would be 180% whereas the neighbourhood has only increased in value by 75%. Add in the factor that this home should be less than the average house in the neighbourhood as it is on a busy street, and we can see that they are quite possibly overpriced which could factor in to the reason why it is still on the market after so long.
All of that being said, you can look at this situation two ways: buying on a busy street could be a poor option as it may be harder to sell (especially in a downturn) and you may not see the same pricing levels as other homes in the area. Or, we could say that buying on a busy street could be a good investment opportunity as you may not have to compete with as many other buyers for the home - which could allow some people to get into areas they might otherwise not been able to afford.
Which scenario you resonate more with depends on your goals and motivations when it comes to buying a house. Does buying a home on a busy road to save money on the purchase price appeal to you or do you think it’s too much of a risk?
Nicole Harrington is a Sales Representative with Realosophy in Toronto. She specializes in using data and analytics to help her clients make smarter real estate decisions, concentrating on Toronto and the GTA, and hosts her own website:SheSellsToronto.com. Email Nicole