A house in Toronto lately sold for more than $1 million over asking price, as the average cost for homes sold in the Greater Toronto Area in December, 2016 skyrocketed by 20 per cent of the members over the previous December, 2015.
The split-level dwelling, located along 19 Talwood Dr. in the Lawrence Avenue East and Don Mills Road area, sold by Ecko Jay Realty Ltd Brokerage on Nov. 10, 2016 for $2,658, 000 after being listed at world prices of $1,488, 800.
The open-concept property showed as “privacy galore” and “truly feels like being in the country,” in agreement with the listing, and has three bedrooms, three bathrooms, a garage, a pool and sits on half an acre of ground adjacent to trails and parkland and close to famous Edwards Gardens.
Ecko Jay, the real estate agent who sold the property, told Global News the house was on the market for 1 week and had 15 offerings before it was sold. He added it was intentionally priced lower to create a bidding war.
Toronto-based real estate solicitor Bob Aaron said significantly undervaluing real estate indices is a common tactic real estate agents use in Toronto to drive up competition.
“It’s just a gimmick to get attention and to provoke a bidding campaign. It can backfire, particularly if nobody shows any interest or they get offers around that listing price and not the current market price,” he said.
“So it’s dangerous and this time it worked and that’s because there are so few listings available in the market .”
The latest statistics from the Toronto Real Estate Board showed annual house sales in the GTA hit record numbers in 2016, with 113,133 residential property sales through the MLS system in 2016 — an 11.8 per cent increase over the members of 2015.
TREB commissioned Ipsos to conduct an online survey of TREB realtors from Oct. 5 to Oct. 21, and reported the average price of a house sold in the GTA rose to $ 730,472 last month, up 20 per cent of the price from December 2015.
“If you look at the demand for home ownership in the GTA over the last year, I mean plainly we ensure very low borrowing cost but that was coupled with a fairly strong regional economy,” said Jason Mercer, director of marketplace analysis for TREB.
“We find low unemployment, we find income growing over the rate of inflation so a lot of households are confident in their ability to purchase and pay for a home in the longer term, but what they are up against in a lot of cases is a real short supply of listings.”
Mercer used to say while there were more than 113,000 deals done through the MLS system, a second consecutive record year, there is a “constrained supply” of homes for sale that is driving up competition and price growth.
“It simply shows given the fact that while we’ve seen sellers’ market conditions over the last two or three years, they only grew stronger in 2016,” he said, adding he expects to see housing purchases continue to grow under the current market conditions this year.
“And if we don’t see any sort of change on the supply side we should continue to see upward pressure on house prices.”
Aaron commented that given the relatively short supply of houses, the risks in underselling a house such as the 19 Talwood Dr. property is smaller to the listing agent.
“A more realistic listing might well $2.2 million, but when you undervalue it greatly, it gets the attention of so many people and they probably had a huge bidding campaign and a lineup in front of the house ,” he said.
” So it worked and everybody was happy except the buyer I guess. The numbers of X dollars above asking price to me are relatively meaningless. It’s the market out there and the arms-length open market system seems to work and that determines the value .”
Source: Global News