Pretty but shallow?

Another performance map came out today about Toronto's real estate market in the past year. I cannot resist these things and will spend a good chunk of time staring at each neighbourhood and wondering why some (and in fact most) have increased in price and a few have kinda bombed. I certainly believe that some neighbourhoods and micromarkets have a better chance at appreciation than others. I enjoy how this interactive map gives you the stats in each neighbourhoods, though I have to say that these neighbourhoods do some times contain vastly different kinds of housing.

On the downside, this kind of map can come off as a little too simplistic. For example, according to the map, Liberty Village properties have actually dropped in price from 2010 to 2011.  It suggests that the prices of condos (which is most of Liberty Village) have fallen in price. I feel that the prices in this area with existing condos, particularly a number of conversion projects, have increased in value. So, it's not so much that properties have fallen in value, but that newer, smaller condos have come to market at a lower price point bringing the average down. Kinda hard to get across in an interactive map.

So, have fun with the map, but don't take it too seriously. http://bit.ly/ozFwar

Selling a Condo? Timing is every thing

Earlier this year, I helped a buyer purchase in a pretty amazing loft conversion at a reasonable price on the subway line. We were not the only ones who thought it was amazing though. There were two offers on the property. The funny thing:  a year earlier, during a time when the housing and condo market was pretty strong, few were buying the condos in this particular building. Why, you ask? Timing.

Once new condos are registered, there are usually a flood of condos that come to market for a particular project. Most developers will not let buyers sell their condos until the building is registered, though assignments can happen before this date. Often, a number of investors, particularly in large condo developments, want to get rid of their condo as soon as they can so they don't have to pay a mortgage and condo fees, especially when they have no intention of living in their unit. Unfortunately, when all the condos come up for sale at the same time, there is too much competition for a given product and condo remain unsold or sells for less. 

Flash forward a year or two and glut of condo sales on a new, healthy development usually passes. 

I would say the best time to sell a condo is about 5 years after you buy it, especially in an established or emerging Toronto neighbourhood. At this time, your condo hopefully has become more in demand, and there are fewer number of units coming to market. The design of the condo has not become too out of date and condo fees have not started to increase to cover aging heating systems and infrastructure of a given building. 

You may not be able to time the market, but you could have a better shot of timing the sale of your condo. 

Buying Under 300K

I received a call the other day from a Toronto magazine researcher who was trying to figure out where the next up and coming neighbourhood is going to be for 2011 and 2012. She asked me if a couple had a $300 000 limit, could they buy a decent but humble house in one of the latest emerging neighbourhoods in this city.  The key word to focus on here is "emerging" because I think you can buy a house for that price in a neighbourhood that won't likely improve much. 

It's a tough one. She wasn't asking me about emerging neighbourhoods, but about pre-emerging neighbourhoods.  I told her that Carlton Village in the northwest part of the city comes close. It has some promise though a long ways to go. I'm not sure you can get a home under 300K, but the neighbourhoods around this area are improving. So, it makes sense that this one will too. How fast is any one's guess. The homes are still not as renovated but they're decent stock - with the right renos. There's not groovy coffee shops nearby or yoga studios to visit yet.  You'll have to travel a little for that, but as far as this city goes, it's a good place to get in.

Outside of the old city limits of Toronto, you can certainly find a house for under 300K, even in Etobicoke and Scarborough - though be very selective buying here.

The truth is, if your budget is under 300K and you want to live in the city, buy a condo.  Yes, condo fees can be pricey, but it's a good place to start for your first home. Same rules apply here. Buy in an emerging neighbourhood or even an established one. But also buy is a smaller development, like a townhouse or some thing that is unique. If you live in a 40 story condo, there are probably 3 or 4 condos for sale at the same time when it comes time to sell. So, you'll always have competition. Older condos are good if you want a lot of space, but they do start to fall apart after awhile, sending maintenance fees up. They also don't sell as well if they look dated. Best to get in early on a newer development, then sell it in 5 to 10 years before it becomes too dated. Then go buy your awesome house with the money you hopefully make!