A house in Toronto lately sold for more than $1 million over asking price, as the average cost for dwellings sold in the Greater Toronto Area in last month skyrocketed by 20 per cent over the previous December, 2015.
The split-level dwelling, located at 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 offers “privacy galore” and” genuinely feels like being in the country, “in agreement with the listing”, and has three bedrooms, three bathrooms, a garage, a pond and sits on half an acre of land adjacent to roads and parkland.
Ecko Jay, the real estate broker who sold the property, told Global News the house was on the market for 1 week and had 15 offers before it was sold. He added it was intentionally priced lower to create a bidding war.
Toronto-based real estate lawyer Bob Aaron mentioned significantly undervaluing real estate listings is a common tactic real estate agents use in Toronto to drive up competition.
“It’s just a gimmick to get attention and to energize a bidding war. It can backfire, specially if nobody presents any interest or they get offers around that cost and not the increased cost,” 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 presented in annual house sales in the GTA reached record numbers in 2016, with 113,133 residential property sales through the MLS system in 2016 — an 11.8 per cent increase over 2015.
TREB commissioned Ipsos to conduct an online survey of 3,518 realtors from Oct. 5 to Oct. 21, and reported the average cost of a house sold in the GTA rose to $730,472 in December, 2016, up 20 per cent from December 2015.
” If you look at the demand for buying houses in the GTA over the last year, I entail plainly we have very low borrowing cost but that was coupled with a relatively strong regional economy,” mentioned Jason Mercer, director of marketplace analysis for TREB.
“We have low unemployment, we have income growing over the rate of inflation so a lot of households feel confident in their ability to purchase and pay for a home in the long-term, but what they are up against in a lot of cases is a real short supply of listings.”
Mercer said that while there were more than 113,000 deals done through the MLS system, a second consecutive record year, there is a “lack of listings” of houses for sale that is driving up rivalry and cost.
“It only gets back to the fact that while we’ve seen sellers’ market conditions over the last two or three years, they only developed stronger this year,” he mentioned, adding he expects to see house purchases will continue to grow under the current market conditions this year in 2017.
“And if we don’t see any sort of change on the supplying side we should continue to see upward pressure on housing costs.”
Aaron said that given the relatively short supply of houses, inherent risks in underselling a house such as the 19 Talwood Dr. in an up-scale area is smaller to the listing agent.
“A more realistic listing might have been $2.2 million, but when you undervalue it greatly, it gets the attention of so many people and they probably had a huge bidding war and a lineup in front of the house ,” he said.
“So it worked and it was a happy time for everybody except the buyer I suppose. The number of X dollars above asking price to me are comparatively meaningless. It’s the market out there and the arms-length open market structure seems to work and that determined by the value.”
Source: Global News
