A For Sale sign is displayed in front of a house in the Riverdale area of Toronto. The number of properties on the market is increasing, but at the level typically seen at the very beginning of the spring market.Evan Buhler/The Canadian Press
The number of property owners willing to list their homes for sale is edging up in the Greater Toronto Area but a chill remains.
Andre Kutyan, broker with Harvey Kalles Real Estate Ltd., believes the spring market in the GTA is behind schedule by two months or more.
The number of new properties with “for sale” signs is increasing, but at the level typically seen at the very beginning of the spring market.
“It feels like February,” he says.
Often during the early weeks of a new year, eager buyers compete for the few listings available.
With demand high and listings scarce, Mr. Kutyan favours the strategy of setting an eye-catching asking price and an offer date.
He recently listed a two-bedroom condo for sale in the St. Lawrence Market area with an asking price of $679,000.
Twelve buyers submitted bids and the unit sold for $827,000.
Another two-bedroom unit in the building had been sitting on the market with an asking price of $829,000 after starting out at $849,000.
Some of the bidders who lost out on Mr. Kutyan’s unit then placed offers on the unit a few floors up, which sold conditionally, he says.
The strange tempo of the market has some sellers and some agents trying various tactics to drum up a deal.
In one case an agent knocked on the door of homeowners in Lawrence Park and suggested he has clients willing to buy the property for $4-million.
The homeowners are clients of Mr. Kutyan. They are considering downsizing but haven’t found a new property to buy, he says.
Mr. Kutyan says the cold-calling agent’s clients appear to be looking for a deal; he estimates the house is worth more – approximately $300,000 more. The homeowners are not willing to part with the property at less than market value, he adds.
“My sellers are not motivated by anything but price. There’s no deal, there’s no steal – they want a premium.”
In the upscale enclave of Forest Hill, homeowners who would like to sell called Mr. Kutyan to look at their property. The sellers are hoping to fetch $17-million but in Mr. Kutyan’s opinion the house is worth less than $15-million.
The owners are trying to sell the property privately by spreading the word to agents who trade in the neighbourhood and offering a commission to anyone that brings a buyer, he says.
“You’re going about this all wrong,” was Mr. Kutyan’s advice. “You’re over-exposing the property.”
He recommends that the house be listed on the open market with an asking price that will grab eyeballs quickly.
The scramble for business is making some agents more aggressive, while the lack of listings is leading some sellers to feel over-confident, Mr. Kutyan says.
“We’re so starved for inventory and this is the nonsense we are dealing with.”
Patrick Rocca, broker with Bosley Real Estate Ltd., says phone calls from potential sellers picked up during the week of March break in Ontario, he says, as some homeowners began looking for opinions of value.
“The sellers are not out there like they should be, or we would like them to be, at this stage.”
Some are still hoping for a return to the peak price of early 2022, he says.
“I think that’s a drastic mistake. We’ve come back quite nicely but we’re nowhere near last year.”
Demand from buyers is strong, he says, but the frenzy of late 2021 and early 2022 has not returned. Some house hunters are willing to compete for a property but many remain hesitant.
A three-bedroom detached house in Leaside for $1.601-million after Mr. Rocca listed it with an asking price of $1.549-million. The house needs work, he says, and some buyers are reluctant to take on a renovation given the shortage of workers and high cost of materials.
By comparison, a renovated three-bedroom semi-detached with an asking price of $1.399-million in Leaside sold for $1.680-million.
Mr. Rocca believes that the average price in April will have risen slightly from the March figure of $1,108,606, but new listings are about the same as they were in March in mid-town, where he does much of his business.
In Leaside, there were eight listings in the third week of April. In the nearby Davisville area, there were 20. Mr. Rocca says the numbers are typically higher for the period following Easter and March break, which in most years is prime time in the spring market, Mr. Rocca says.
“I don’t know what it’s going to take to make sellers understand it’s a good time to list,” he says.
Mr. Rocca believes the summer may be quiet if the current trend continues. Potential sellers with a home that appeals to families should list before school breaks for the summer, in his opinion.
“After June 15th, it’s a very delicate balancing act.”
Mr. Rocca says one source of new listings may be homeowners with fixed-term mortgages who are required to renew those agreements in the coming months.
He has talked to owners seeing their monthly mortgage payments double or triple.
But while some homeowners are able to reduce their other expenses or work out agreements with their lenders, others may be under more pressure to sell.
Buyers, meanwhile, are feeling more confident that interest rates will not climb sharply in the near future. The latest numbers from Statistics Canada also show that inflation is easing towards the Bank of Canada’s 2-per-cent target.
Farah Omran, economist with Bank of Nova Scotia, notes that the national housing market saw higher sales in March compared with February. Ontario and British Columbia were the main drivers of the activity, she says.
An uptick in sales was accompanied by a decline in listings in many Ontario cities, the economist adds. Toronto, Hamilton-Burlington, Barrie, Ottawa and Guelph are all now considered in balanced territory between buyers and sellers.
With a recovery in sales and no significant increase in supply, buyers may be enticed to rush back to the market before prices go up any further, in turn adding more pressure on activity and prices, she cautions.
Mr. Kutyan believes the lack of listings so far may indicate that the Toronto market is lagging behind the traditional timing. Under that scenario, sales and listings will keep rolling into the summer.
At the moment, people thinking about selling are concerned about where they’re going to land.
“That’s the standstill that we’re at right now.”