Baby, we got a bubble!?

[ISYM]

Well Eug, someone isn't telling the truth. It's either the listing REALTOR or the Globe.

Fixer Upper? This from the listing:

"Fantastic Well Maintained Multi-Unit Semi In Prime Roncesvalles Village! Great Income Opportunity Or Could Be Converted Back To Single Family. Has Two-1 Bedrm Units, 3 Bachelor Units. New Roof In 2010. High Efficiency Furnace."

The property was exceptionally underpriced and it does happen often enough and it always backfires, anyone recall the $1 listings? A house in the W1/W2 zone recently sold for 50%+ more than asking it's list price under $400k an amount not seen in the area for more than 3 years.

Meh. To be honest it just sounds a lot like you're trying to justify an inflated bid, when even the seller's agent thinks it's inflated.

 

[cdr108]

Well Eug, someone isn't telling the truth. It's either the listing REALTOR or the Globe.

Fixer Upper? This from the listing:

"Fantastic Well Maintained Multi-Unit Semi In Prime Roncesvalles Village! Great Income Opportunity Or Could Be Converted Back To Single Family. Has Two-1 Bedrm Units, 3 Bachelor Units. New Roof In 2010. High Efficiency Furnace."

The property was exceptionally underpriced and it does happen often enough and it always backfires, anyone recall the $1 listings? A house in the W1/W2 zone recently sold for 50%+ more than asking it's list price under $400k an amount not seen in the area for more than 3 years.

then it sounds like the listing realtor was incompentent if s/he thought the final offer was so exceptionally more than they thought it was worth.

as you said, if there were sales in the neighbourhood over the past year or so, that should have given them a reference point.

 

[groovyg]

"GTA REALTORS® Report Mid-Month Resale Housing Market Figures

TORONTO, June 18, 2012 – Greater Toronto REALTORS® reported 4,597 sales through the first 14 days of June – a result that was on par with the strong sales activity reported in the June 2011 mid-month release. While sales were flat on a year-over-year basis, the total number of new listings entered into the TorontoMLS system was up by 16 per cent to 8,382.

“Sales growth continued to be much stronger outside of the City of Toronto in the first half of June. While higher average home prices and slower listings growth in the City of Toronto likely explain some of the disparity in sales growth, recent polling suggests that the City of Toronto’s Land Transfer Tax is having a substantial impact on where many households are looking to buy,” said Toronto Real Estate Board President Richard Silver.

“Recent polling indicated that three-quarters of people in Toronto and surrounding 905 regions who are planning to move over the next two years said that they are more likely to move outside of Toronto specifically because of the added upfront costs associated with the Toronto Land Transfer Tax,” continued Silver.

The average selling price for transactions during the first two weeks of June was $516,834 – up by over eight per cent compared to the average of $477,025 reported for the first two weeks of June 2011.
“The annual rate of price growth remains very high in the GTA. Increased listings will result in more balanced market conditions over the next year, but it will take some time before price growth will moderate to a more sustainable pace. Right now, months of inventory remains very low from a historic perspective and will likely not climb back to the pre-recession norm until 2013,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Summary of TorontoMLS Sales, Average Price and New Listings
June 1 - 14
                             2012                                2011
                        Sales Average Price New Listings   Sales Average Price New Listings
City of Toronto ("416") 1,697    $566,527     3,391           1,850    $516,110     3,050
Rest of GTA ("905")     2,900    $487,756     4,991           2,746    $450,693     4,161
GTA                     4,597    $516,834     8,382           4,596    $477,025     7,211

TorontoMLS Sales & Average Price  By Home Type
 
                    Sales                           Average Price
                   416        905       Total         416       905        Total
Detached           625       1,706      2,331       817,678   580,151     643,838
Yr./Yr. % Change   -2%         8%         5%           9%         8%          7%
Semi-Detached       178        303        481        571,889   393,139     459,288
Yr./Yr. % Change   -24%        5%        -8%           9%         7%          5%
Townhouse          213        516        729        459,318   366,629     393,711
Yr./Yr. % Change    9%         9%         9%           10%        8%          9%
Condo Apartment    668        286        954        367,781   281,094     341,793
Yr./Yr. % Change   -13%       -15%       -14%          6%        2%           5%

What's interesting is if you take a look at the actual 2011 mid June report

the "416" sales are 1,913, "905" 2,874, total "4,787"..

yet here they are lower?? Strange. Didn't want to show an overall sales % drop?


Treb mid june 2012
Treb mid june 2011

 

[Eug]

^^^ Extremely difficult to read.

 

[groovyg]

fixed.

 

[Riverdale Rink Rat]

REALTORS®

Off-topic -- why do Realtors feel the need to all-cap their job title? More than a little precious.

Recent polling indicated that three-quarters of people in Toronto and surrounding 905 regions who are planning to move over the next two years said that they are more likely to move outside of Toronto specifically because of the added upfront costs associated with the Toronto Land Transfer Tax, continued Silver.

Or it could be the $800k + price tag for a 416 detached, no?

I can only imagine the wording of the push-poll question that generated a 75% agreement! I bet I could get 75% against: "If you had the ability to buy a house in Forest Hill for the same price as a house in Brampton, but then had to pay a small land-transfer tax on the Forest Hill house, would you prefer the Forest Hill or Bramption home?"

 

[interested]

Off-topic



Or it could be the $800k + price tag for a 416 detached, no?

I can only imagine the wording of the push-poll question that generated a 75% agreement! I bet I could get 75% against: "If you had the ability to buy a house in Forest Hill for the same price as a house in Brampton, but then had to pay a small land-transfer tax on the Forest Hill house, would you prefer the Forest Hill or Bramption home?"

I am sure it was a leading poll question. Not just the Real Estate industry but everyone uses polls to advance an agenda. Hence the poll must be scientific, neutral, non biased. As they say, he who pays the piper calls the tune.

I believe if the poll was run for true interest the question would read....does $15000 more on an $800000 purchase make the difference between you purchasing or not? I am quite sure the answer is No. However, all these charges....realtor fees at 5% I would believe would be a much greater deterent, Ont. Land Transfer, Moving costs etc. add up. So the $800,000 move is closer to $875,000 anyhow and I can't see personally that $890,000 I won't buy but $875,000 I will.

 

[Eug]

Well, it was a consideration for my mom's purchase. Admittedly it was a small consideration, but a consideration nonetheless. There were a couple of units for sale on the north side of Steeles that we were looking at.

 

[interested]

^^^
I can see where on a $300K purchase on a small condo especially by a young person where down payment is minimal anyhow that the LTT will impact in say Downtown. However, other than the border of TO with its non LTT-taxed neighbours, I don't think it is a major issue. Also, for those Seniors who are on limited budgets, again I can see that.

That said, the TO LTT is another cost but I don't believe the investment decision of this magnitude is ultimately influenced for the most part by the 2% of LTT. As I said, it is the other costs all combined + the purchase price which will dictate. I can't see someone in the $800K average SFH range deciding to live in a different neighbourhood over a 2% price fluctuation.

While I think we all like to complain about any additional costs, I just don'[t think it is the major issue.

In the end Eug, your mother I assume bought where she wanted and the 2% of Toronto Land Transfer was not the ultimate decision maker. I just can't buy this quote from Mr. Silver: “Recent polling indicated that three-quarters of people in Toronto and surrounding 905 regions who are planning to move over the next two years said that they are more likely to move outside of Toronto specifically because of the added upfront costs associated with the Toronto Land Transfer Tax,” continued Silver.

I have to believe that they will move to 905 because prices are cheaper to buy, you get more house for the money. The TO LTT is just a further "incentive" to move outside Toronto but I just don't believe the spin that specifically because of the TLL Tax they will move out of Toronto.

 

[cdr108]

^^^
I can see where on a $300K purchase on a small condo especially by a young person where down payment is minimal anyhow that the LTT will impact in say Downtown. However, other than the border of TO with its non LTT-taxed neighbours, I don't think it is a major issue. Also, for those Seniors who are on limited budgets, again I can see that.

That said, the TO LTT is another cost but I don't believe the investment decision of this magnitude is ultimately influenced for the most part by the 2% of LTT. As I said, it is the other costs all combined + the purchase price which will dictate. I can't see someone in the $800K average SFH range deciding to live in a different neighbourhood over a 2% price fluctuation.

While I think we all like to complain about any additional costs, I just don'[t think it is the major issue.

In the end Eug, your mother I assume bought where she wanted and the 2% of Toronto Land Transfer was not the ultimate decision maker. I just can't buy this quote from Mr. Silver: “Recent polling indicated that three-quarters of people in Toronto and surrounding 905 regions who are planning to move over the next two years said that they are more likely to move outside of Toronto specifically because of the added upfront costs associated with the Toronto Land Transfer Tax,” continued Silver.

I have to believe that they will move to 905 because prices are cheaper to buy, you get more house for the money. The TO LTT is just a further "incentive" to move outside Toronto but I just don't believe the spin that specifically because of the TLL Tax they will move out of Toronto.

i'm sure if another poll was done with the added question regarding 5-6% r/e fees, they would get similar results.


Recent polling indicated that three-quarters of people in Toronto and surrounding 905 regions who are planning to move over the next two years said that they are more likely to use a discounted r/e brokerage who provides full service than the traditional higher r/e brokerage commission structure.

 

[interested]

^^^
I agree that the 5% commission is a bone in everyone (but the real estate associations) side.
That said, people say one thing in polls because they react. When push comes to shove, however, I am quite sure that while eventually more will use discounted r/e brokerages, many who say they will use this will go traditional to "avoid the headache" as it is simpler.

Also, I believe this will be somewhat price sensitive. selling a $300K condo you could go it alone. A Million $ home and people use agents and want the exposure and often are too busy to do the work themselves.

that said, I still find the real estate commission structure excessive, but that is my opinion. I do have the option to not use "full service brokers".

 

[js97]

There is also a big difference for a listing agent vs a buying agent. I always wondered how a listing agent can justify receiving the same amount of compensation for taking a few photos, doing a few comparisons and filling in a listing sheet. At least the buying agent at times work for their compensation by picking up and driving their clients across town (do they still do that?), and can potentially work for 'free' for months before closing on a property.

If you consider the services a buying agent offers to the SELLER - pushing the buyer to close or in some cases, a higher bid - it's money well worth. It's also a form of pre-qualification for the Seller.

I've had the experience of selling my partner's condo privately (condo board add and internet) and we had to deal with some random people that where completely clueless in their market prices (a verbal offer for 20% less in this market!). In the end, we did sell it, and yes the savings where somewhat worth it, but just like any other DIY job, it's one of those that task that I wouldn't recommend if their not too savvy in dealing with people and or negotiations.

 

[Ric]

The last time I checked, real estate commissions were not set in stone at 5% and comsumers could negotiate the commission they paid. There are discount brokerage offering MLS listings for $499 (and even lower). Comfree also provides MLS listing. But I guess people just rather Bitch about 5% as if there are no other option.

I think the issue is that consumers want to work with "name brand agents", (who spend alot of time, effort and money building their brand through marketing etc.) but want to pay the Comfree price; Good luck.

 

[interested]

Ric,
The reality is the real estate commissions are the single biggest cost after the actual price.
It just seems a bit strange that the president of TREB is quoted as saying that people are leaving TO because of LTT.
Real estate commissions have remained at 5% despite prices almost doubling in the past 10 years. I know of few others in any other industry where their take home pay has doubled for doing the same job.
My personal preference would be to pay a realtor an agreed to reasonable hourly wage for work rendered.
However, I will probably end up paying 4 and 1/2% (2% to list and 2 and 1/2% to sell) when I sell my next property because as I said, I do not wish the aggravation of doing the work myself.

 

[AKS]

It just seems a bit strange that the president of TREB is quoted as saying that people are leaving TO because of LTT.

Like discount brokerages, you have a choice. If you want to pay 5% commission, it's your choice. If you want less fees, go to discount brokerages. Similarly, if you want to pay TLTT, buy in Toronto. If you want to avoid TLTT, buy outside of 416 area. Hence, people might opt to purchase outside of 416 because of TLTT. They have a choice of discount brokerages in Toronto, but they don't have a choice of TLTT. They have choice for both if they buy outside of Toronto. However, if the buyer only wants to buy within Toronto, the TLTT won't deter them. When it comes down to money, saving every bit counts. Even if someone wants to live in the 416, they might not want to pay more than they have to. House prices in Toronto are already higher than 905. On top of that there's the extra land transfer tax. Based on the pros of 905, it's not surprising people would move out. The pro in Toronto is the convenience of public transit and amenities (depending on location). It's understandable Eug's parents would move to 905. They have the convenience of public transit at a close distance, no TLTT and maybe slightly cheaper price.