Wednesday, 25 January 2012

Hot, Warm or Cold? Another way to measure the success of your neighbourhood

This isn't a blog about taking a bath. Don't be fooled by the pic. This is about a different kind of hot and cold that come from some thing called "days of inventory". That is, how long it would take a GTA neighbourhood to sell off all of its property if nothing new came on the market. Neighbourhoods that would sell off in fewer days would have tighter inventory issues and buyers would gobble up the listings. These are the hot hoods. The fewer days of inventory you have, the healthier your neighbourhood would be, at least from a seller's perspective. On the other side, if your neighbourhood would take months to sell off it's inventory, it's a sign that there is quite a bit of supply in your part of the GTA, and you would be in cold location.

These stats should not be mistaken with how many days it takes to sell your property. Both are similar, though, in that  fewer days means a hotter market and a much stronger chance that you can sell your property for a higher price.

So, now for the fun part. An interactive map! The link below will show you how your neighbourhood stacks up based on stats from December 2011. And remember: Don't take this report too seriously. Mimico is considered to be a "cold" area where the housing inventory would take longer to sell out. My experience, however,  has been that Mimico is one of the best emerging neighbourhoods to get in on. Of course, not of  all of Mimico is built the same. South of Lakeshore between 1st and 15th streets, properties often go way over asking very quickly.  Meanwhile, all of those massive condos along the Lakeshore took a lot longer to go.

So, with that said, the hottest Toronto neighbourhoods with the shortest time to clear inventory would be High Park/Junction and the Beach with inventory selling out in 36 days. At the other end of the spectrum, there's Jane/Finch and the Bridal Path that took 102 days to sell.

If you want to see how you're neighbourhood has done, click on this interactive question:

How does my neighbourhood stack up?

Saturday, 21 January 2012

Getting In On An Emerging Neighbourhood

Usually in these rants, I like to go on about the city as a whole or zone in on a specific emerging neighbourhood  - those transforming areas of Toronto that are changing from downtrodden or dull to culturally cool and distinctive. They're places where I believe you could invest wisely now, and  see better price appreciation on your home than the average Toronto neighbourhood. There's Danforth Village, Mimico, and the Junction Triangle to name a few. But today, I want to be very specific and move in from Toronto neighbourhood to a property in an emerging neighbourhood. Namely, a condo unit between the Junction Triangle and Brockton (sometimes called Bloordale), near Lansdowne and Bloor, that I believe has quite a bit going for it.

Now let me be clear because I am a real estate agent after all. This is not me trying to promote my own listing. I will not make any money on the sale of this unit. It is, however, a great property in a neighbourhood that may still has a few strip joints on the main drag, but that also has a growing number of art galleries and restaurants moving in. And it doesn't hurt that it's on the subway line.

This unit itself is in an authentic converted loft - a much more unique condo option compared to the cookie cutter giant boxes in some areas of Toronto. It is 900 square feet on 2 floors with a living room, dining room, office and bedroom.  I rarely like to recommend condos that have no parking, but in this particular location, the street parking is not such a bad option because you can actually find parking on the street. It's listed at 355K. And for its size, you would have a hard time finding an authentic loft condo in other parts of the city for a similar price.

If you don't believe me and my hype, see for yourself.

Thursday, 19 January 2012

Toronto 2025 - What Can You Expect?

Sure it's a little odd of me to offer predictions about Toronto in 2025 when I have a recent blog explaining how most specialists who try to guess where the housing market is going in the past usually screw it up - be it naysayers who say there will be a mind-boggling crash in Toronto in 2011, which didn't happen, or those Americans who said the market will recover quickly after their mind boggling crash starting in 2006. 

So, let me be clear, these are not my prediction. They are other people's predictions that I find quite convincing, or at the very least, interesting. And I think these predictions are not as difficult to see as when the housing market will rise and fall. They are bigger demographic trends happening in Toronto that will have an impact on how the city grows and how we live in our neighbourhoods. 

I think it would be a pretty good guess for example, that Toronto is going to get bigger. The GTA is projected to be around 7 million in 2025, and the Official Plan of the city does currently encourage more density and vertical building. So more people living closer together. Hopefully in well-planned neighbourhoods. 

Toronto will also resemble cities like London and New York more closely - for better and for worst. Some neighbourhoods will be glitzier and richer encouraging more talent to come to the city. Of course, the downside is that there will be more poverty in Toronto in 2025. Neighbourhoods will be a lot more polarized along these lines, despite some city efforts now for more mixed neighbourhoods like the current project in Regent Park. So more rich, more poor and less middle class. Some may feel there is still time to get out there and fix this future and bring better services to struggling areas and encourage more mixed housing use like they do in Portland, Oregan or Berlin. Other investors may feel they want to invest in an area that will likely be richer in this future but is still affordable now. Most of those improving areas extend along the lake and follow the current subway lines. This link will show you the graphic of Toronto neighbourhoods and their wealth distribution in 1970, 2000 and 2025 (projected).

Toronto will also see a huge demographic shift to  older baby boomers who have invested a lot in real estate, but who, in general, have not saved enough for their retirement. So, they will be downsizing leading to more competition for smaller units and less competition for bigger ones - according to some experts like Financial expert and blogger, Preet Banerjee. 

And finally, you may want to consider where the future subways are going to be built. That's a tough one since transit plans in this city change with every new government, and Toronto still has the lousy distinction of being one of the worst funded transit systems in the world. Still, the Eglinton line is now on the table. The Yonge line will continue it's expansion north of York University. And I dream that some day, and I don't know how, that the relief line will be added to Toronto. It's been floating around for decades, but never seems to get far, but also never seems to be fully given up on either. 

Like any predictions, these are not sure things. They're just convincing educated guesses for people who want to make their city a better place or who want to make better real estate investment choices.  And that's better than a kick in the pants. 

Thursday, 12 January 2012

The City's Solution to Ugly

One of the ugliest intersections in this city has to be Dundas West and Bloor Street. It's more undecided and poorly planned than excessively dangerous or any thing of that nature. I often scratch my head wondering why this corner of the city is so lousy. It's central, right at Dundas West subway station, and near great neighbourhoods like Roncesvalles,  High Park, the emerging Junction and Junction Triangle.  The homes one block away in most directions are well-maintained heritage homes or better-than-average condos.

I was thrilled when I heard the styish Giraffe condos were going to go up at this corner a few years ago. The rest of this intersection is populated by the worst of the 60s and 70s - a massive rental building that is not to scale with the rest of the neighbourhood, a high school with a great field behind it that no one can see, and an ugly cement office building that was probably already ugly before it started deteriorating. The Giraffe condos were well-designed, eco-green, and a could have been a great addition to the corner. But alas, the City and the nearby community shot that down. To be honest, I was shocked such a great project was denied, considering some of the giant box condos that get the green light. I can see, though, from a practical perspective how building a large condo on a tiny lot at that location could prove to be a bit of a traffic nightmare on a corner that's pretty congested already. Still, the unpractical side of me was disappointed.

Regardless, it is clear that this corner is in desperate need of attention - from Giraffe or elsewhere. And though the City denied Giraffe from developing here with their current plans, the City was crafting some new ideas on how to improve this intersection and other streets around the city. For about 10 years, the city has conducted several "Avenue Studies" throughout Toronto. These streets are designated "avenues" by the city, and must follow certain new by-laws, which are aimed to improve the neighbourhoods around highly-utilized, though not always well-functioning streets. The idea is to make the street use and future development smarter. More densification where developers are encouraged to build higher, but not so high as to look out of wack with the rest of the buildings around it.  The building height, for example, along Dundas and Bloor would ideally fall between between 3 and 6 stories for any future build, a consistent building height for this existing neighbourhood. But it's not just about height.  The avenue plans of the City also focus on further setbacks from the street to allow for a larger pedestrian sidewalk, more public space, and future development that fits with the design and look of a given neighbourhood.

It seems that current Toronto is trying to make up for the poor planning of the the past by encouraging smarter development in select neighbourhoods. What does that mean for buyers? Well, if you are buying near one of the streets that the City has now designated an avenue, then you stand a better chance of price appreciation on your home or condo down once (and if) this "Avenue" plans pan.

Thursday, 5 January 2012

How to Survive the Predictions of 2012

Whether you're waiting in line at the supermarket, sitting around the festive turkey or after enough New Years' drinks where you feel you have the right to be heard yourself, predictions in real estate for Toronto in 2012 will be heard. This year, there is a sense out there in the public that the Toronto real estate market may be cooling off or correcting.  Many have told me that Canada is overvalued by 10 to 25% . Others say Canada is at the very end of one of the longest housing booms in the Western world. And the real naysayers say the market will crash in a spectacular, disastrous U.S. nosedive or even worst. What still shocks me: Most real estate commentary seems to be overwhelmingly apocalyptic. This happens every year, but particularly this year. 

Canada is overvalued by 10 -25% comes from an article in The Economist back in the Fall. I think Canadians were so flattered to be mentioned in such an international magazine, that many media outlet circulated this info so that this opinion really permeated the Toronto public in a substantial way. My response has been that it's easy for Canada to look so expensive (along with France and Australia) when many homes around  the world have seen so much price depreciation. But the biggest problem I see: If Canada's real estate market dipped, it would not happen the same all over the country. In fact, it wouldn't happen the same over the city. The market in Vancouver is not the same as the market in Toronto or Saskatoon or Calgary or St. John's. And the market is High Park is not the same as Riverdale or Scarborough or Milton.  So, to say home prices in Canada are overvalued by whatever amount really doesn't seem very helpful to any one.  

If you are one of those who simply are convinced that the market is heading south, but you would like to buy some thing nonetheless, I suggest a few things. First, and this is a general statement: It is often safer to buy a house than a condo right now in this city. There are only so many homes left and not a lot being built, especially in desirable or emerging neighbourhoods. You will not see an oversupply of houses happen in this city. If you are buying a condo, however, don't panic. I think a smaller boutique/unique condo or a townhouse has a better chance of surviving a downturn. Giant nondescript condos in near strip malls with a weak and generic commercial strip where there are a large number of renters and high maintenance costs would be the worst place to buy right now. It may be the least expensive, but it will be a tough sell later, especially in a buyer's market. 

Now,  I say all of this not because I am certain a downturn is going to happen. Really, I don't know. What I know is that almost all predictions are wrong. There are always some folks who say the sky is falling as far as real estate is concerned. When I bought my first house back in 2004, I was told that I was  buying at the top of the market, even though I sold it for more than twice the price 5 years later. 
At the end of 2010, Toronto Life published a feature article on all the neighbourhoods that will tank in 2011, citing Leslieville and the Junction as the most in jeopardy. Yet, in 2011, they were two of the best performing neighbourhoods. And of course, on the other side, many in the United States had said there will be a small blip of a correction before prices took off again back in 2006. And we all know what happened there. My favourite crystal ball reader though has to be Garth Turner. He's writes blogs and even published a book in February of 2010 saying Canada's housing market will crash. Of course, I imagine if you say there is going to be a downturn long enough you are bound to be right at some point.