Eager buyers, ‘outrageous prices’: Scenes from the spring housing market

Coming off a winter of falling prices and mortgage worries, this year's traditionally busy spring real estate market will be among the most anticipated and fraught in memory.

In high-demand neighbourhoods, a shortage of listings is pushing up prices but limiting the choices for sellers who want to move on to a new home.

Buyers, with less spending power thanks to high borrowing costs, are struggling to keep their heads amidst inevitably emotional bidding wars.

Skittish investors are prompting a rethink and, in some cases, a repositioning of the condo market.

There's some optimism that after a year of rising interest rates, sluggish sales and falling prices, consumers are keen to act, but also feeling anxious and cautious. As one realtor put it, we're not out of the woods yet."

The Star followed four GTA agents to see how they're guiding clients through this turbulent market, and to get a sense of what's in store this spring.

When it comes to pricing, outrageous' still rules

Inside a bright, wood-filled house in Bedford Park, realtor James Frodyma is assuring homeowner Michael Kadonoff that despite home sale prices dropping elsewhere in the city, prices are still up annually in his uptown neighbourhood.

After eight years in the four-bedroom house, with three young kids under tow, Kadanoff and his wife are thinking of selling and finding a bigger place in the area - somewhere each kid could have their own room, while keeping an office for working from home.

You paid $1,251,000 for it. The good news is you've made a lot of money on this since then," Frodyma said with a chuckle, rattling through comparable homes either listed or recently sold in the neighbourhood.

With a splash of paint and some staging, he estimates Kadonoff's could be snapped up for upwards of $2 million. That's 66 per cent more than Kadonoff and his wife paid for the property in 2015, when they bought it in a bidding war with an offer 132 per cent of the $949,000 asking price.

Kadonoff wonders about the timing, and how the market might shift.

Frodyma tempers expectations, noting this year's market is unlikely to resemble the red-hot activity of 2020 or 2021 - but said he had noticed an uptick in buyer visits and an upward creep in home prices, since the Bank of Canada announced in January that it would be pausing key interest rate hikes after eight consecutive jumps.

The hard part will be finding another home in the neighbourhood, Frodyma warns, with hardly anything on the market.

Observers in Toronto have noted that home inventory within the city hasn't built up amid the market slowdown, with the real estate sphere instead remaining tight and competitive due to demand. It's a situation that has kept prices in the city high, which along with increased interest rates, continues to pose a challenge for those trying to crack into the market for the first time.

After leaving Bedford Park, Frodyma drives to Trinity Bellwoods and King St. W, where 24-year-old Sophia looks at a pair of two-level, one-bedroom lofts, each listed for around $700,000.

Working in sales for a life science research company, she currently lives with family in North Toronto - a situation she feels fortunate to be able to rely on. She and her boyfriend, a retail manager, have been saving up with hopes of jumping into ownership rather than forking out rent in Toronto's expensive market. Even with those savings, buying would feel all but impossible without extra financial help from their families.

The prices are just outrageous," she said, shaking her head. They'd been hoping the recent market cooling would work to their advantage in snagging a better deal and getting their foot into the ownership ladder. We were just waiting a little bit, for the prices to get down."

-Victoria Gibson

A condo market reckons with skittish investors

Brendon Cowans slides open the balcony door on a three-bedroom condo in Toronto's ICE complex to show off a stunning view of frigid Lake Ontario.

The unit is tastefully furnished, with seafoam green accent walls, and a den, which is really more like an office nook, in one corner.

But it took forever to sell" said Cowans, a sales rep at Property.ca Inc., with a bunch of lowball offers," finally going for $1 million in January after sitting since November 2022.

The market was definitely not the way it is now," said Cowans, pausing to take a client call. Business is better now.

The inventory is still quite low, but we've seen bidding wars pick back up," he added. Looking ahead to spring, he anticipates some sort of a frenzy again" but it depends on what happens with interest rates.

The former owner of the ICE unit had it on Airbnb, for as much as $11,000 a month. But once the city's short term rental rules went into effect, he started leasing it out for months at a time, before eventually deciding to sell, according to Cowans.

The 37-year-old Cowans, who is also the VP of sales at Property.ca, deals mainly in condos, in the downtown core. On the one hand, some investors, especially the ones that bought in the last few years, are skittish. But demand for this type of housing is still high.

The ICE visit comes after a morning spent making calls to clients and semi warm" leads. Some go straight to voicemail, but one man seems receptive. He's interested, but he wants to wait until interest rates go down.

One client is going to cash out" because the tenant in his investment property left early and with the higher interest rates it's not worth it anymore.

Interest rates seems to be a common topic, at Property.ca Inc., based in a renovated historic building in the heart of the Distillery District with low wood beams and stone walls.

At a morning meeting the agents (mostly on Zoom) congratulate a colleague on scoring a $9-million Forest Hill listing and discuss the trickiness of pricing properties in this market.

After a brief reminder on the art of the follow up" and how to engage leads without seeming like they are fishing for a commission (ask about kids, vacations, etc.), they speculate on what will happen with rates.

Mortgage broker James Harrison says they're busy with pre-approvals, potential buyers who want to be ready for what happens next.

Property.ca broker manager Peter Epstein speculates that rates could rise again in April.

We're not out of the woods yet, he says. Stay tuned, prepare your clients."

- May Warren

Where the bidding wars and crowds still rule

Cailey Heaps is typing furiously, her keystrokes barely overtaking the stream of pings issuing from her cellphone. The CEO of the Heaps Estrin brokerage on Bayview Ave. has been juggling calls, emails, texts and chats with her team since arriving at her cozy office around 8 a.m.

At noon, agents Amanda Gaskey and Alex Corey are perched across from Heaps balancing their own computers and phones. It's the deadline for offers on a hot commodity, a spacious family home in South Leaside, that Heaps and Gaskey have priced for competition.

There's a clear front-runner among six offers so the team is inviting competing agents to improve their bids - conditions won't fly.

While the other agents confer with their clients (ultimately the house will go for about 13 per cent above list price) Heaps is dashing to a listing appointment, meeting a client she helped buy for 19 years ago, who is now preparing to sell. It's the second new listing Heaps has lined up this day. Another former client wants to sell his west-end condo to return to Europe. A member of the sales team will meet with him in person later in the week and she will join them via video chat.

Meantime, it's also the offer day for Heaps Estrin agent Jeannine Volpe's listing on a Moore Park home. This one attracted 52 showings in a week and drew crowds to the weekend open houses. Priced slightly lower than Heaps' and Gaskey's listing, the house attracts three offers. The successful buyer turns out to be Heaps's own client, who bid about 10 per cent above asking. (Heaps says she doesn't know what the other offers looked like. There are strict rules about information sharing when the same brokerage is handling both the buyer and seller.)

This is Toronto's downtown real estate market, a place where demand remains so strong it's tough to detect the yearlong downturn in housing sales and prices. Keen buyers and low inventory in neighbourhoods like Leaside, Rosedale, Moore Park and Sherwood Park have continued to command multiple offers. But listings are so scarce Heaps guards her clients against listing until she's sure she will be able to find them their next home.

It's not that Heaps Estrin hasn't felt the impact of the market's slide. Sales volumes were down about 10 per cent last year, but that followed a 50 per cent rise in 2021.

Compared to other people in our industry, (2022) was still a very strong year and we gained market share," she said.

February 2022 was 40 to 50 per cent busier. Heaps Estrin was listing 10 to 15 properties a week and every day was an offer day. From the last half of 2022 to now, the tempo is completely different," says Heaps.

Heaps says the traditionally busy spring market is well underway downtown. Her brokerage's two Moore Park sales and another east-end sale that drew 23 offers, all on the same day, is a signal.

It's what we've been feeling in our gut," she said. It just came to fruition - that the buyers are back in the marketplace."

-Tess Kalinowski

Renos, staging and winning over cautious buyers

On the 10th floor of a North York building, Toronto realtor Sohail Mansoor has rallied together a three-piece team - a stager, a painter and a contractor - to ready a two-bed two-bath condo for sale. Built in 2005, the property is relatively spacious, but in need of some TLC.

This is a very bold colour - we call it bossy," explains staging consultant Lucie Brand, about the dark walls that contrast with the kitchen's honey-toned cabinets. She envisions a lighter colour scheme that draws inspiration from the existing countertops. With some paint, you've got an updated kitchen," Brand says.

On the other hand, Mansoor's clients will be getting the unit's dated appliances and faded parquet floors entirely replaced. The couple bought the condo in 2012, for their son to eventually move into. After recently getting married, he decided he wanted to buy a home instead. Mansoor's clients figured they'd sell the condo to give their son some money and are happy to renovate if it means better resale value.

Though supply is tight and homes don't stick around long on the market, buyers are still cautious in this uncertain market. Mansoor says proper staging and strategic renovations are always a good idea, but especially important right now.

We're seeing that renovated properties are getting a lot more attention than properties that need work," Mansoor says, partly attributing the trend to the undesirable high costs of construction.

The other reason is that buyers are being more particular about their purchases. When the market was peaking (last year), everything was selling," Mansoor says. There was this frenzy that if you didn't buy a property at that moment in time, you'd never be able to get into the market."

That feeling has subsided for people."

In terms of potential buyers for his client's condo, Mansoor isn't expecting or targeting investor interest. Taking into account high interest rates, flattening home prices and the recently enacted foreign buyer ban, he says the market isn't as lucrative for flippers as it used to be.

Our plan here is to prep the condo to make it appealing to end users," Mansoor says. An investor is just looking to get it for the cheapest price - they're not going to care about the kitchen cabinets being painted."

Once they list in April, after staging and renovations, Mansoor thinks the property will take about two weeks to sell, without any trouble.

My phone started ringing early January with people saying they wanted to consider buying in the next six months to a year."

It's surprising to see how resilient the market has been," Mansoor says, anticipating some price stability apart from a slight two to three per cent increase, year over year. But life goes on for people.

They get married, they have kids - it comes to a point where people say you know what? We still want to move."

- Dhriti Gupta