“There are some really great opportunities in the market right now,” says Deana Feldman, a broker at Chestnut Park Real Estate in Toronto. “But we’re almost in the period where buyers are going to miss the boat, because it’s picking up.”
Toronto's real estate market is characterized by both optimism and concern as of late, depending on who you ask (or which headline you read). But there’s definitely room for positivity, says Feldman, who specializes in the city’s coveted midtown region.
Feldman says that at the height of the red-hot pandemic-times market -- throughout 2021 and the first quarter of 2022 -- the City of Toronto was seeing 100 to 150 sales a day. But when interest rates and inflation started to climb, things changed.
“That [sales] number really started to go down once the interest rates started to go up,” explains Feldman. “We saw a low point around Christmastime 2022, when we saw 30 sales in the city a day, which is really low.”
Feldman says the sentiment started to change in January, however, when the Bank of Canada announced that it would only bump its interest rates by 0.25%, and that it didn’t anticipate any further hikes due to calming inflation rates. “That started to drive up the market a little bit, so things got a little busier in February,” she says. “Now, March’s most recent announcement that the central bank would hold rates gave consumers a lot more confidence again, and we’ve seen a lot more action.”
For example, last week, after a downtown property sat on the market for a month, Feldman received three offers on it, and was able to sell for higher than her client was expecting.
“I have another house that I just listed in Lawrence Park that has only been online for a day, but it’s had multiple showings already,” she says. “I’m seeing multiple offers on several properties again. It’s not as crazy as it was during the pandemic; there’s no panic buying this time, but there’s definitely a pent-up demand, and things that are priced well are moving quickly.”
The return of multiple offers isn’t specific to certain areas; rather, Feldman says she’s seeing it happen throughout the city in both freehold homes and condos.
“It’s a price point thing,” she says. “Anything under $2M seems to be moving really quickly. The luxury market is a little slower -- we’re not seeing multiple offers in that space – but it’s still moving. Properties that were on the market for months are now seeing action again.” For example, Feldman’s $4M to $5M townhomes have seen a recent uptick in showings.
Feldman notes the pre-construction market was hit hard by the interest rate hikes and subsequent drop in consumer confidence -- but there’s new signs of life there too. “What we’re seeing now for the first time in many years is developers offering really good incentives in the pre-construction market,” she says. “For example, I think Raglan House offers the best incentive in the city right now. Buyers are able to take advantage of pre-construction sales being a little slower.”
Raglan House -- coming to Bathurst and St. Clair -- is currently offering a generous income supplement.
“The project is done in five years, and once you close on it, the developers will be giving you back money,” says Feldman. “If you bought a one-bedroom unit, you’re getting $2.5K a month as an income supplement. If you bought a two-bedroom unit, you’ll get $3K as an income supplement. This means that, if you bought a one-bedroom and your tenant is paying $3500 in rent five years from now, the developer will top you up with another $2500. So, you’ll be cashflow positive until 2030, which is so far away from now that it gives buyers so much time for interest rates to come down, and rents to increase.”
“Pre-construction is where you should put your money, because real estate is a safe investment,” Feldman explains. “You’re typically buying for five years out, so interest rates are not going to impact you. I think we can all agree that interest rates will be lower than they are today, and rents will be higher.”
When it comes to buyers -- especially those looking to buy at a competitive price point (i.e. first-time buyers or those in the market for properties under $2M) -- Feldman stresses the importance of mortgage pre-approval. “This way, you’re prepared, and not going into it blindly,” she says. “If you have to sell your home and then buy, you want to make sure you get a proper appraisal from a real estate agent and know what your house is worth so you know how much fire power you have when you’re buying.”
Feldman also highlights the incomparable benefit of working with an agent who has a deep and current understanding of a neighbourhood -- and its market -- so you can act on new properties right away.
“You have to have your hand on the pulse of the market in which you’re focusing on,” says Feldman of effective realtors. “I focus on midtown Toronto, so I am aware of every single sale that takes place. I look at the MLS every single day, multiple times a day. I know everything that’s transacting on and off the market. I’m very knowledgeable of the neighbourhood.” Feldman says she’ll often know of new properties before they even hit the market.
“An agent who lacks a deep understanding and involvement in a specific market won’t have as many opportunities for their buyers,” she explains.
For sellers, a good realtor also understands the importance of pricing strategy, Feldman says. “You want to price really well,” she says. “If you price too high, the listing is likely to go stale, and you could end up getting a lower price than your client wanted because it’s gone stale, and now has a stigma attached to it. If you price too low, you’re leaving clients’ money on the table. It’s about pricing it just right, where you’re attracting many people to come see it and hopefully [driving] up multiple offers.”
Feldman also emphasizes the value of staging. “I stage every property,” she says. “If you have it nicely cleaned, staged, and use a top quality photographer, those are all things that make the listing stand out. When agents don’t do it, they’re leaving money on the table for their client.”
Moving further into the warmer months, Feldman expects consumer confidence to increase further. “I see a lot more positive media regarding real estate,” she says. “I don’t think that there’s going to be another rate hike and there are talks of them going down by the end of the year or the start of 2024. If that’s the case, there will be even more demand -- and we already live in a city of shrunken supply, so we’ll see the prices start to go up.”
“When the market is slow, it’s a good time to buy,” says Feldman. “There are some really good deals in the market right now.”
But, like many things in life, these deals won’t last forever.
To watch Deana Feldman's full interview, click here.
Cover Image:Christie's International Real Estate
This article was produced in partnership with STOREYS Custom Studio.