A Toronto home sold for $400,000 above the listing price in December. Selling a home in Canada in the winter, with snow on the ground, should not be this easy or successful. This is blaring evidence of the over-heated Toronto real estate market.
Open House Visitors
“The Star,” Canada’s largest news source, calls the Toronto area real estate market “frenzied,” as listed homes are selling for above asking prices, but this example borders on excessive. Three recent “open houses” saw around 800 visitors.
The sellers received 50 offers in advance of the “offer presentation” date. Obviously, among the open house visitors were some serious buyers. The timing was right, as there is a shortage of “house for sale” listings during the Holiday Season.
There were so many visitors during the open houses, many people had trouble finding their shoes left in the foyer.
The Financial Statistics
This home was underpriced at $699,900, but, it was dated, as the sellers did no rehab or updates. The home, just north of Toronto, finally sold for $1.1 million, $400,000 over the asking price.
This was an estate sale and purposely priced at a below-market level to facilitate a rapid sale. Renovations would not be finished before springtime, which would bring more competition if the market did not “cool off.” Anticipating many visitors, the broker scheduled open houses from one to five PM in the afternoon for both a Saturday and Sunday.
There were so many visitors, the broker had to get help from other agents. Even with the extra help, the lead broker had to ration time both days, limiting agents and visitors to three-minute conversations.
The Sizzling Toronto Real Estate Market
During the open houses, the real estate agent commented that “it looked like a rock concert on the street.” Recently, it’s been common that homes for sale are sold for more than the asking price.
The Toronto-Ontario market has been hot, like the overheated real estate market in the US prior to the recent recession. “Supply and demand 101” also plays a role. When inventory (number of houses for sale) is low and demand remains constant, prices rise. Although this case is extreme, it’s still a good example of supply and demand theory at work.
However, it’s still rare for a house that is not “staged” for sale, with torn wallpaper, used carpets, and an older kitchen to sell for over $1 million. As an estate sale, the home was already stripped of its contents, showing all its 2,670 square feet and its flaws. The home’s condition seemingly didn’t matter to the eventual buyer.