Patrick Rocca a broker with Bosley Real Estate talks about Toronto’s spring real estate market and some of his view on what both buyers and sellers can expect.
Jeff: I have with me Patrick Rocca, who’s a broker in Toronto. Patrick, I wonder if you could tell everyone a little bit more about what you do.
Patrick: Hi. Sure, Jeff. My name is Patrick Rocca. I am a broker with Bosley Real Estate. We’re a boutique brokerage here in the midtown area. Leaside, Davisville is my market and that’s where I specialize. I’m the top agent in that area.
Jeff: Fantastic. Now, Patrick, since we talked last, in the summer, there were a couple of things which happened over the fall. I wonder if you can go into what the fall market was like.
Patrick: Well, you know what? It was a continuation of the summer market, which was a continuation of the spring market, which was abnormal for your typical real estate cycle in a year. Normally, you have a great a spring, followed by a bit of a slow down in the summer, followed by a take up in the fall. Last year, it just never stopped. It was a continual upward climb in terms of prices. We saw extreme price increases not only in the Leaside, Davisville area, but pretty much across in the central core of Toronto. The fall, it was probably, bar none, one of my busiest falls in my 24 years in the business.
Jeff: Now, why do you think that is? What do you think some of the drivers are for that?
Patrick: I hate to sound like a broken record, and I probably said this before in a few of my interviews, but it’s really driven by two key factors. And that’s simple economics; supply and demand. There is no supply. There is a ton of demand, and low rates. I mean, really, that’s what’s been driving this market. I was interviewed for a global mail article last week. I said the same thing in that article. In my listings in the Davisville and Leaside area, I was seeing the same buyers offering on my properties three and four times. They’d be losing and they come back to the next listing I had. They’d offer again. It’s frustrating for buyers, a very, very frustrating market. If you’re a seller, it’s been a great, great run.
Jeff: Now, I’d like to come back to that in a second. But do you think there’s anything that’s forecasted change in the spring market?
Patrick: I can’t honestly say that there is. I mean, I have to chuckle because every December and January, you get the same sort of media press coverage that talks about the real estate market, the bubble, the overheating, and it’s going to crash. It’s the same thing every year. I mean, honestly I could write the article in June for December and January that I see in all the papers, all the TV and radio. It’s consistent. I just don’t see it happening. I mean, again, it’s locationally driven. If you look at the market as a whole across Canada, yeah, there’s some key things that are happening that are going to have a dramatic effect on certain markets. I mean, you look at oil in the west, in Calgary, in Alberta, in Saskatchewan, and I think there’s going to be some major downturns there in the economy.
But if you look at Toronto or you look at Vancouver, it’s not that they were isolated. It’s just that we’re different markets. We’re driven by different things. I just don’t see, short term anyways, that that will have any impact on our market. There’s talk of rates maybe creeping up later in the year. But as I said before in a few of our interviews, I think that you’re going to have to have a spike in rates and a spike in inventory before there’s ever any correction in the market. I mean, the fearmongering that’s going on now with the media. I mean, maybe it’ll have some impact, but I just don’t see it. I mean, it’s too early to tell. I mean, we’re just literally starting into the spring market. We’re just starting to see listings come on, but I just don’t see it short term.
Jeff: What do you think the spring market looks like in terms of product available?
Patrick: I hate to say it, but honestly, I think it’s going too be as tight or maybe even tighter than last year. I personally see that in my own inventory. I mean, I’m doing a lot of evaluations right now for people that are wanting to sell their house, but not as much as I would like to be doing. When I compare it to last year, interestingly enough, I was chatting with my wife about this last night and she said, “We had the same conversation last year.” I feel that it might be a little less inventory. But again, too early to tell.
Jeff: Now, one of the things I want to go back to is for people who want to sell the property and perhaps it’s not as fully updated as they would like, maybe there’s an older kitchen or maybe an outdated bathroom, what’s your advice to them?
Patrick: Again, it really depends on the product. It depends on the price point. Case in point, right now I’ve got a lovely semi with a private drive coming out in Davisville next week. The kitchen was lovely, bathroom not bad, the house in general needed just a fresher, painting, minimal stuff to sort of make it cosmetically appealing to people. Obviously, staging is a key component. I don’t normally get into getting my clients to redoing kitchens and redoing bathrooms to sell the properties. I just don’t feel that the work, the money, the effort and the time that needs to go into it is beneficial. I mean, if you put 50 into a house, it’s going to take you three to four months, are you going to miss the market?
Are you going to get 50 out or you’re going to get 100 out? If you’re going to get 50 out, which you will for sure, what’s the point of doing it, right? I mean, you’re breaking even. Again, it really depends on the price point. Nine times out of 10, I’m getting into a house and I’m getting people to do things to present the property better. I mean, I’ve had situations, instead of redoing the kitchen, painting out the cupboards, doing stuff like that. Now, if it’s a long term fix, if people come to me, and I have this happen quite frequently in that they’re very preliminary and they’re a year out, yeah, sure. Do your kitchen. Do your bathroom. Enjoy it for the year and then we’ll talk about it a year from now when you’re ready to sell. But short term, very rarely do I get people to do extensive renovations to prepare for sell.
Jeff: As you know, affordability is key for buyers these days. How do buyers go about getting their most bank for their buck and to think creatively, especially in this tight market?
Patrick: I think we talked about this last time. It’s a tough one. I mean, for buyers, affordability is all relative. I mean, if you’re looking for deals, there’s not a lot of them. There have been a few. If you look across the market over the last six, seven months, there’s been instances where I’ve talked to a few of my buyers personally and said, “Listen, that hasn’t sold. I don’t know why. It’s a good deal.” So you have to have an agent who’s proactive, watching properties, seeing if they sell. If they don’t sell, if they sit, there’s opportunity. But in general, most of the properties, if they’re priced right, if they show well, if they’re marketed properly, they sell within seven to 10-day span. The opportunity for buyers, in my opinion, is in the higher end. Those homes tend to sit a bit longer if you’re moving up into that 1.7, 2.2 range. There’s usually a little play on the homes. But anything in 700 to 1.5, there’s not a lot of deals.
Jeff: Okay. Fantastic. Well, thanks again, Patrick. We’ll touch base in a few months to see how the busy spring market has gone and look forward to chatting then.
Patrick: Okay, Jeff. Thanks very much. Nice talking to you.