35 Church St., No. 703, Toronto
Asking price: $1,495,000 (November, 2023)
Previous asking price: $1,495,000 (September, 2023)
Selling price: $1,460,000 (November, 2023)
Previous selling price: $300,000 (March, 1994)
Taxes: $5,363 (2023)
Property days on market: 68
Listing agent: Christopher Bibby, Re/Max Hallmark Bibby Group Realty
In a roughly 40-year-old condo building at Church and Front streets, this 1,723-square-foot corner suite has a prime spot on the seventh floor overlooking the iconic Gooderham Building, also known as the Flatiron Building. The owners failed to find a buyer in their first few weeks on the market, so they tried a common strategy; cancel the listing and relist immediately at the same asking price, a move that puts the property back at the top of the list of online property search results. About a week later, they landed a deal $35,000 short of their list price.
“What made this unit very distinct is it was in the southwest corner of the building, so in the solarium and on the south side and west side of this unit, you had a completely unobstructed and protected view of the Flatiron Building/Gooderham Building,” said agent Christopher Bibby.
“If we were unsuccessful, we’d have that spring market to target. But the fact there was no competition and there was nothing quite like this listed for some time, we had some optimism.”
What they got
This two-bedroom suite has windows in every room other than the eat-in kitchen and the two bathrooms. A solarium is accessible from one bedroom and the living room.
The unit includes a storage locker and parking. A monthly fee of $1,563 covers water, cable, concierge and use of common amenities, such as the indoor pool and squash/racquet court.
The agent’s take
“Everybody coming in just loved the fact the bedrooms were separated, and it had a proper solarium, dining room, living room and enclosed kitchen,” said Mr. Bibby. “So it really felt like a home.”
“A lot of [interested] buyers in there love to get out, walk and take advantage of the local amenities, be it Berczy Park or be it St. Lawrence Market. And you have quick access to the harbourfront, Financial District and Entertainment District.”
The desolate landscape of the early January real estate market does not deter Toronto-based real estate agent Manu Singh from perusing new listings.
Mr. Singh, of Right at Home Realty, kicks off the New Year with a fresh search of the city because that’s when determined or desperate sellers stand out.
His strategy starts with tracking properties for sale that have their listings cancelled in December. Many sellers are just testing the market, he says, and they are not motivated to negotiate a deal if they don’t receive the price they are hoping for.
Many in that cohort will hold off relisting until the spring. But the listings that pop up again right after New Year’s Day signal a home or condo owner who needs to sell, in his view.
“Why else would you list in early January?”
Mr. Singh used similar analysis throughout the unpredictable market of 2023 but he likes the clear line that rolling the calendar over to a new year draws.
Drilling down farther, he looks at the number of times a property is relisted and the per cent change in price each time. If the seller relists at the same price, he moves on.
“Again that signals to us the seller doesn’t really want to sell – they just want to get their price,” Mr. Singh says.
If he sees a sharp downward slope – with a seller cutting the price by $100,000 each time, for example – he senses an imperative to sell.
The real estate market in the Greater Toronto Area was under pressure throughout much of 2023 as 65,982 properties changed hands, according to the Toronto Regional Real Estate Board. That compares with 75,140 sales in 2022 and a record 121,639 transactions in 2021.
The average price in the GTA edged up slightly in December from a year earlier to stand at $1,084,692.
Against that backdrop, Mr. Singh has had the most success with finding detached houses in solid neighbourhoods for move-up buyers. He rules out investment properties by checking the history to see if any portion of the home has been rented out in the past.
One set of clients was looking for a larger primary residence for their family. They spent many months looking at detached houses but most on offer were not very appealing. The couple was also very nervous about interest rates and the economic backdrop.
With so much uncertainty swirling, Mr. Singh recommended that the couple look at the factors they could control. One was the sale of their existing townhouse. If they sold that first, they would eliminate one element of risk.
The couple listed the renovated three-bedroom townhouse near King Street West and Niagara Street with a below-market asking price of $1.299-million and an offer date near the end of September.
That strategy fizzled as buyers backed away from the prospect of competing for a property.
The couple relisted with an asking price of $1.379-million. This time buyers did step up and the townhouse sold for $1.355-million a few days later. The couple also negotiated a closing date that would give them a few months to search for a new house.
During the fall, more high-quality listings arrived on the market, Mr. Singh says, and the couple was able to find the type of move-up home they were looking for.
They paid $2.05-million for the property, which was originally listed for $2.3-million, Mr. Singh says, and likely would have fetched $2.5-million at the market’s 2022 peak.
In another scenario, a couple of move-up buyers decided to purchase a new property first.
A detached house in the city’s west end was listed with an asking price just below $2-million. Mr. Singh kept an eye on the listing and notified his clients when the homeowners reduced the asking price to $1.8-million, which indicated to him that they were motivated to sell.
The buyers were able to negotiate a deal for $1.703-million with a closing in March. They are hoping that the recent slight decrease in mortgage rates will work in their favour and they will have an easier time selling their townhouse.
Looking towards the spring, Mr. Singh believes that buyers may become less hesitant if mortgage rates dip, but there’s also the risk for sellers that many more listings may arrive on the market.
In the condo market especially, he has seen many investors who have decided to sell some of their holdings.
“There’s a renewed sense of investors testing what they can get before the spring market,” he says.
In December, condo sales remained at a very low level compared with the historical average.
Robert Van Rhijn, founder of Strata.ca, says the average price of a condo in Toronto’s downtown core dropped below $1,000-per-square-foot in December for the first time since January, 2021.
Mr. Van Rhijn says agents have noticed a perception among buyers that they dominate the market. Some are lobbing offers that are disconnected from any fundamentals or recent comparables.
“They’re getting lowball offers that they’ve never seen before,” he says of the listing agents.
The recent average of $997 per square foot marks a 17-per-cent drop from the high water mark of $1,203 per square foot in February, 2022.
In the 416 area code, the average price of a condo dipped 4.1 per cent in December compared with December, 2022, according to TRREB.
Downtown units in the popular two-bedroom segment were fetching around $970,000, on average, in December, Mr. Van Rhihn says. Typically, they were trading hands at about 1.9 per cent below the asking price, he adds.
“There’s a perception among buyers that they dominate the market,” he says, but they don’t. “We’re in a soft buyers’ market.”
The Toronto condo market has gone through many gyrations since the early 2022 peak. As the Bank of Canada embarked on a series of interest rate hikes through that year, prices in the segment declined.
Around this time last year, buyers began to see a window of opportunity. That sparked a spring 2023 rally that brought the average price back to $1,127 per square foot in May.
“We saw quite a bit of a rebound,” says Mr. Van Rhijn, who is also broker of record at Strata Realty.
As prices recovered, buyers were becoming increasingly cautious just as inventory began to swell.
The listings of condos for rent also began to climb after the rush of students returning to school diminished.
Between September and early December, Mr. Van Rhijn calculated, listings for rental units jumped 82 per cent.
It’s quite common for inventory to rise after the busy time at the end of summer leading into September, he says.
“This year we didn’t see a slow rise – we saw a pretty dramatic increase.”
Mr. Van Rhijn believes that part of the reason for the boost is that sellers who haven’t been able to strike a deal are also listing units on the rental market.
Owners who have renewed mortgages in the past year or two have been hit with higher interest rates. Many investors with multiple units are struggling to keep up with carrying costs.
Mr. Van Rhijn is hearing from agents at his firm that some investors are grappling with negative cash flow of between $500 and $1,500 a month.
“They can’t make the numbers work,” he says.
Mr. Van Rhijn says some of the owners who are particularly stretched would prefer to sell but they keep a listing on the rental market as a safety net.
“I get the sense that a lot of the sellers are flirting with the rental market.”
As for buyers, some are still recovering from the stress of bidding wars in the spring. Others are put off by the combination of high rates and rich prices.
“There’s a faction of them that have just given up. They’re not happy with what they can afford.”
TRREB president Jennifer Pearce is predicting that lower mortgage rates coupled with a relatively resilient economy should bring a rebound in home sales in 2024.