This house at 20 Elm Ave. in Toronto's Rosedale was designed by architect Frederick Herbert and built of red brick and sandstone in high-Victorian style.DEBORAH BAIC
Buyers in the Toronto-area real estate market are embracing their power after more than two decades of competing, cajoling and throwing huge cash premiums at sellers.
This fall, they feel no need to rush as houses linger on the market. While properties are selling, many buyers are watching to see if prices have farther to fall.
Jimmy Molloy of Chestnut Park Real Estate says negotiations can be arduous at times and agents need to be creative.
“You have gracious winners, and you have bad winners,” the real estate agent says. “Some are saying, this is a time to get even.”
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The singularity of one landmark Toronto residence led to a sale about 30 days after the property landed on the market with an asking price of $13.95-million.
Mr. Molloy and Lindsay Van Wert of Chestnut Park listed the house at 20 Elm Ave. in the exclusive enclave of Rosedale in July.
The seller was former Toronto Maple Leafs president Brendan Shanahan, who parted ways with the hockey club in May.
As August wound down, a buyer paid $13.2-million for the heritage-designated home with five bedrooms and eight fireplaces.
The five-bedroom home, owned by former Toronto Maple Leafs president Brendan Shanahan, sold for $13.2-million in August.DEBORAH BAIC
“It was one of the original grand mansions of Rosedale,” says Mr. Molloy.
The circa-1890 house was designed by architect Frederick Herbert and built of red brick and sandstone in high-Victorian style. Romanesque Revival influences include the rounded arch above the entrance and ornamental brickwork.
Many original elements were restored, Mr. Molloy says, but the home was renovated with modern comforts.
A reclaimed 19th-century turret from the Cathedral Church of St. James stands at the end of the backyard swimming pool.
Very few houses have the history and character to match.
In a buyer’s mind, they wonder, “If I don’t buy this one, when am I going to see the next one?” says Mr. Molloy.
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In South Hill, Mr. Molloy knows of another storied home which will be brought to market by another agent.
The house needs to be completely redone down to the plumbing and wiring, he says, but he believes buyers will be willing to take that on because of the home’s position on the escarpment, which runs along the former shoreline of Lake Iroquois.
“It has this commanding view over downtown Toronto,” Mr. Molloy says. “That house is a jewel.”
He adds that many properties change hands without landing on the Multiple Listing Service of the Toronto Regional Real Estate Board.
“The currency of real estate as an agent is information,” says Mr. Molloy. “There’s a bit of a shadow market, and that shadow market takes place at the higher end.”
In the upper tiers of the market, buyers see no need to rush if an asking price seems too rich.
“Luxury is not defined by price,” says Mr. Molloy. “There are a lot of expensive houses.”
He points to recently built houses which tend to follow the same pattern, with little to distinguish them beyond whether the marble finishes are beige or grey.
“Those houses are just sitting there,” says Mr. Molloy. “If you don’t buy that new construction on that street, you can buy another one around the corner. They’re basically interchangeable.”
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Shelly Kaushik, senior economist at Bank of Montreal, notes that trade uncertainty remains a continuing concern for businesses, and the share of respondents planning for a recession ticked up to 33 per cent in the third quarter.
At the same time, the labour market remains a top concern for consumers, Ms. Kaushik notes.
The unpredictable outlook for the real estate market is also slowing down buyers.
In midtown Toronto, temperatures vary by neighbourhood, says broker Andre Kutyan of Harvey Kalles Real Estate.
In areas with high inventory, properties are languishing.
“You need to put the buyers under pressure,” Mr. Kutyan says. “Flip the narrative.”
In Ledbury Park, buyers were hovering on the sidelines after he listed a home with an asking price of $6.295-million at 508 St. Germain Ave.
“There’s no precedent over $6-million in this neighbourhood,” he says of the house with a backyard pool and garden cabana.
Nine sets of buyers looked at the house during the exclusive period before it was listed on the MLS, including three who returned for a second showing.
“I couldn’t get any of these people to come to the table,” he says.
But once one buyer submitted an offer, two more quickly joined in the bidding.
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The sale is conditional until next month, so the sale price has not been disclosed. But when the deal firms up, it will set a new benchmark for the Ledbury Park neighbourhood, he says.
That tactic can’t be used on every listing, he adds, but it can be successful for houses a buyer perceives as irreplaceable.
“It’s all about the optics.”
In the area around York Mills Road and Bayview Avenue, the challenge for homeowners with a sign on their lawn this fall is that buyers have many competing properties to choose from.
Shortly after Labour Day, Mr. Kutyan listed a five-bedroom detached house with an asking price of $6.495-million in the upscale enclave.
A recent search revealed there are 30 to 35 listings in the $5-million to $8-million range in the surrounding area.
“When you’ve got 30 houses to choose from, who’s in control? The buyer is.”
Values in the enclave escalated rapidly in past years – especially during the high-octane run of 2016 and early 2017. Prices deflated in many parts of Toronto, including this enclave, after the Ontario government introduced a Non-Resident Speculation Tax in 2017.
“There’s probably two years’ of inventory there,” he says of the current pace of sales. “If I’m a buyer with $6-million, I’m going to look at everything under the sun and find the best fit for my family. Then I’m going to sniff out the best deal.”
Buyers who prefer keeping their real estate transactions quiet are often drawn to a pocket listing, while others like the cachet of “early access.”
The risk for sellers, Mr. Kutyan says, is that those house hunters feel less pressure from rival bidders.
“When you bring it to them exclusively, they think they have all the time in the world,” he says.
This four-bedroom home at 94 Melrose Ave. in Toronto's Bedford Park had an asking price of $1.799-million and received 14 offers.The Print Market
By contrast, Mr. Kutyan drew 14 offers for a four-bedroom detached house in Bedford Park with an asking price of $1.799-million. Two bullies bidders attempted to buy the home at 94 Melrose Ave. before the date set for reviewing offers, but the sellers spurned their bids.
On offer night, the home sold for $2.435-million.
The home, renovated in 1996, is in an ideal location close to Yonge Street and the area’s coveted schools, so Mr. Kutyan set an eye-catching asking price knowing the property was likely to spark a bidding contest.
Still, he was surprised at the number of bidders who entered the fray. In the current market, even the strategy of pricing low often does not garner more than two or three offers.
The house, located close to Yonge Street and the area’s coveted schools, sold for $2.435-million.The Print Market
On St. Germain Avenue, Mr. Kutyan advised the homeowner that his asking price needed to be lower than the replacement cost.
Buyers are more likely to be enticed by the move-in-ready home if it would cost more to realize their own vision.
In this case, he justified the record-breaking asking price by estimating that it would be a $7.7-million endeavour to replace it.
“That’s what we have to sell buyers on today – value.”