The Morrisons are not what their real estate agent would call motivated home buyers. They’ve been looking off and on for the past six months, checking out homes in midtown Toronto whenever their agent finds something she thinks would meet their exacting criteria.
“We’re in a situation that we don’t have to jump on just anything that’s halfway promising,” says Stella Morrison (not her real name, since she doesn’t want to spoil the deal with their agent). “We don;t have to rush and we can wait to get exactly what we want.”
Part of the reason they don’t feel rushed is that prices are no longer climbing dizzily as they have in recent year.
“We’ve noticed this, the longer we wait now, the lower the prices — we’ve noticed this in just the past couple of months,” Morrison said. “In the price range we set for ourselves, we’re looking at a little bit better homes as time goes on.”
These may be disturbing words for those of us on the other end of the real estate equation, those of us hoping to sell our homes or pondering the values of our homes, perhaps as retirement assets.
We’re pondering how much our homes are worth today. Are their values still growing exponentially in a scorching hot Toronto market or is the bubble finally bursting, as long anticipated by real estate skeptics?
For midtown homeowners, the latest figures from the Toronto Real Estate Board offer both some good news and some not-exactly-bad — call it sobering — news.
The good news is that our houses are still worth a lot — with detached homes in most of our North Toronto and Leaside communities valued an average of well over $1 million and many approaching or surpassing the $2-million mark. This is above most of the rest of Toronto, not to mention way above most of the country.
The sobering news, however, is that those values have been declining lately.
The April price index from TREB shows drops of one to 20 per cent from a year earlier for single-family detached homes in midtown communities.
Condo prices have fared better with some areas showing hikes and others experiencing declines — averaging out to relatively flat prices across the midtown area.
These local results reflect a fall in sales in the wider real estate market since a year ago. In the 416 area code, a drop in detached home sales (down more than 34 per cent) has been accompanied by a drop in their average sale prices (down more than 14 per cent), according to TREB figures released May 3.
As might be expected, TREB itself puts a rosy spin on the trend.
“While average selling prices have not climbed back to last year’s record peak, April’s price level represents a substantial gain over the past decade,” said TREB president Tim Syrianos in a press release accompanying the figures. “A strong and diverse labour market and continued population growth based on immigration should continue to underpin long-term home price appreciation.”
Board analysts predict a “resumption of a moderate and sustained pace of price growth” in the second half of this year, according to the release.
The best areas
Even with the latest figures, it is difficult to determine the best and worst areas in midtown for real estate now. No one area has a completely positive picture and no area is completely negative.
If we’re looking at all types of homes, the best real estate scene may be in the areas designated C11 (including Leaside, Bennington Heights and Thorncliffe Park) and C12 (including Lawrence Park, Bridle Path, York Mills and other neighbourhoods north of Leaside up to Hwy. 401). They’ve seen the price index rising nearly eight per cent over the past year.
However, this hike is driven mainly by condo sales. The values of detached homes have fallen in these two areas, respectively, down about 5.7 per cent and 15.7 per cent over the same time period.
Coincidentally these are two areas the Morrisons have been looking in.
“Leaside is still the most reasonably priced neighbourhood we’ve considered, better than Lawrence Park, for what you get,” Stella Morrison says.
Similar mixed signals are presented in the affluent C09 area (Rosedale, Moore Park, Summerhill). The price index is up about six per cent for all homes and down an equal amount for detached houses.
Slightly more successful is the mixed bag that is the C02 area (Yorkville, The Annex, Wychwood, Deer Park). All homes are up more than five per cent, while detached houses are down about 1.5 per cent. The increase appears to have been driven by new luxury condominium developments. The average detached home in the area, though is still almost $1.9 million, the highest in midtown outside of the C12 nexus.
The C03 area (which includes the different neighbourhoods of Forest Hill and Oakwood) has relatively flat prices, showing almost no change in home prices over a year ago and a small drop in detached homes.
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