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Jeffrey:
I am here with Patrick Rocca of Bosley Real Estate here in Midtown Toronto, and we’ve talked to Patrick quite a few times in the past. And I’m going to let Patrick tell everyone about him and what he does.
Patrick:
Hi, good morning, Jeff. Patrick Rocca here with Bosley Real Estate in the Midtown area. I predominantly work the Leaside Davisville Midtown North Toronto area. And yeah, happy Tuesday.
Jeffrey:
Yes. Fantastic. So, Patrick we were talking last and you reminded me that you’ve been in this business for 30 years and 30 years, a lot has changed. So take us back to 1993 and, and what it was like. This is kind of, you know, early to pre-internet, really. So how are things different?
Patrick:
Wow. Yeah, they’re a lot different. I was getting married in 1993, which was interesting. I was just starting out in the business. There actually was no business. It was very, it was a very quiet market at that time. We were coming out of that that real huge downturn of the late eighties, early nineties, high interest rates. So it was totally a different market. I mean the way we did business was different. There was, there was no internet, or we were just getting into the advent of internet, sort of in the mid, I would say the mid-nineties. Everything was done via fax. Like when, when I had clients who were looking for listings, I would fax them listings in the morning. It was kind of weird. We would get daily updates from the Toronto Real Estate Board on paper, like in a booklet.
Patrick:
And we would, you know, photocopy stuff and fax it to clients, and it was just yeah, it was very weird. Open houses were really a big thing back then. And I remember when I started just doing a lot of open houses and yeah, it was a very flat market. It wasn’t a seller’s market and it wasn’t a buyer’s market. It was just it was just blah. But I, I managed to get into it at a kind of a good time for me in, in my neighborhood. And it all worked out and sort of snowballed. Yeah.
Jeffrey:
Thanks for taking us back then. You know, faxes and paper and things have really changed quite a bit for not only for, for sellers, for buyers, for agents before we get onto the current market, do you have a feeling that with all this information flowing around, that things happen more quickly in the market, that, you know, transactions happen more quickly?
Patrick:
Oh, a hundred percent. Yeah. Everything is, is fast and furious now, even, even in the down market. I mean, I mean, with the advent of internet and, you know, people have more options and abilities to to, to research online all, albeit, that does not replace a realtor. So people can look online, they can look at what’s available, what has sold statistics all that sort of stuff. So, I mean, but stuff still happens very quickly. I mean, with the, with the age of the internet and, and everything that we’re dealing with yeah, things, things happen really quickly. I mean, when I put something online, like literally, it’s, it’s, it’s live. I mean, just an example, I listed something yesterday. I’ve already got 15 showings on it. So I mean, it’s, things happen much more quickly now.
Jeffrey:
Wow. And, you know, going back to the, the 93 market, I remember that, you know, there was a big, big run up in prices than all of a sudden, you know, things kind of came back to earth. Interest rates were in the, the high teens. If people can even imagine that, that’s, that’s crazy. But now, you know, there’s, there’s a whole bunch of different things that are actually happening to the market. So maybe you could talk to, you know, the, the, the seller side and, and the buyer side of what we’re seeing in the last sort of four to six weeks.
Patrick:
Well, it’s been, honestly, since we, we actually had a talk a couple of weeks ago, and even since then, things have changed. I mean, the reality is, is that no one really knew what to expect coming into 2023. I mean, we had a very interesting 2022, I mean, a big run up in the first three, four months of the year then with interest rates going up a softening of the market and subsequently a decline of prices. I mean, and, and it, they, they, that decrease ranged anywhere from 10, 12% up to 25, 30% in the outside of Toronto in the, in the 9 0 5. So, I mean, in, in, in my market specifically Midtown Leaside, I mean, it’s, it’s 12 15% down easy. Summer came last year there was nothing people traveled because of they were allowed to, and they were able to after all the, the lockdowns and chaos during Covid fall came, and actually, it, it didn’t come.
Patrick:
It was there. There it was like buyers sort of said, you know what? We’re on hold. We’re going to wait. We’re going to see what happens. And the fall was a very, very quiet time. There was transactions but they were few and far between. As I suggested back in the fall. And as I suggested earlier this year, I think when we talked, and when I talked to several of my clients, I think we flatlined in the fall. I was telling buyers in the fall, you know, buy now, buy now. It’s, it’s a good time. I mean, not stuff is sitting, there’s good opportunities. It’s down, you know, 15%. I mean, at least in our area from, from, from the peak. And of course, you know, some people did most buyers as, as is the case, sat on the sideline because they were reading the papers and they were reading all the experts apparently, quote unquote in the media that we’re saying, you know, it’s coming off another 25%.
Patrick:
I didn’t think that, I thought maybe there was a downturn for maybe another three, 5% potentially. It, that has not happened. We have started out of the gate this year just last week I did three deals multiple offers on one a hundred thousand over asking we are starting to see multiple offers. We are starting to see property sell over asking does that mean we’re out of the woods? Absolutely not. But it, it’s a sign that there are buyers out there. I listed with something last week. I had 33 showings in, in 24 hours, two offers, like I said, sold it for a hundred thousand over asking another, another property, same sort of thing. Sold it, not over asking, but I’ve got a, I’ve got a very good offer with a good closing firm condition firm offer, no conditions. And I’ve just listed something yesterday.
Patrick:
Again, I’ve had 15, 16 showings in 24 hours, I suspect it will be sold, and it’s a $3 million home. So, and we’re seeing it, we’re seeing it right across the board. We’re seeing it from, you know, $1 million properties, even up to the higher end. I saw something last week, a three high, $3 million properties sold to multiples. So I’m not saying the train has left the station but I’m saying that, you know, there’s, there’s some positive signs and how long that will continue. I, I, I don’t know, but it’s, if you’re, if you’re a buyer, you might want to get in now.
Jeffrey:
Yeah. And like anything on either side, you know, of, of any market situation, there’s people who basically profit or do better when things rise. And there’s also people who profit when things fall. And you know, there’s, you know, going back to the internet, there’s all sorts of information, and both buyers and sellers can be overwhelmed with the amount of information and opinions about, you know, should you sell, should you wait? You know, interest rates are going up now, they’re going down. And it really becomes difficult for someone who does not spend their entire day in real estate understand the market over years to really get a sense of, of what’s happening not only in the next sort of six to 12 months, but on a year to year basis. You know, we heard last fall, oh, the market’s going to come off in, in the GTA 30%, and, you know, people are going to be, you know, struggling to meet their payments because rates are going to rise so much. And, and to a large extent, like you said, things are, are less horrific than that. So, you know, in, in terms of what you advise your clients, how do you help them get a sense of what the, the, the direction is and provide them guidance and, and where to go, and whether they’re buyers or sellers?
Patrick:
Well, I mean, it’s different on, on, on both levels, right? I mean, if, if it’s buyers, I mean, I’m, I’m telling buyers. I mean, and, and you know, it’s funny, I was on a, a Facebook chat last night and I was looking, I didn’t comment on it because I just didn’t want to go there. But I mean, I’m, I’m listening to people talking about the market that have no clue, that one, one person was insinuating that you know, the market’s off and it’s going to come down like the 1980s, and it’s still plummeting. And I mean, it’s just, there’s so much misinformation out there on the, on the internet right now. And people, everybody thinks that they’re a professional realtor or professional real estate expert. And, you know, at the end of the day, it’s about working with a, an experienced person, someone who’s been there, someone who’s in the market.
Patrick:
I mean, you know, some people will say, oh, as realtors, we’re trying to spin a, a positive spin on the market just so that we can do sales. And, and, and that’s not true. I mean, we’re in the market. I, I’m, I’m seeing what’s happening and I’m being realistic. So if you’re a buyer, I’m telling you, you should be buying. I, I was saying that in November because it’s a good time. Yeah. The market may come off another couple percent, it ain’t coming off 2025, excuse my English. But it’s a good time to buy if you’re long term. If you’re a seller and you, you must sell or you are in the market to sell it’s a different game. You have to be realistic. You have to look at the market and understand that, listen, we’re not February, 2022.
Patrick:
I mean, the house that I sold this week for 1.7, very reasonable seller they understood that that property last year was 2.1. Mm. They realized they weren’t getting 2.1 in February, January of 2023. They got 1.7, they got a hundred thousand over there asking last year we would’ve probably listed at the same price. 1.599, we would’ve got two this year we listed 1.599, we got 1.7. So as a seller, you have to be realistic. You have to understand that the market has changed. Those sellers that are out there still hanging on. And, and there are people out there. I mean, right now inventory is still very low. And if you look at lease side, we’ve got 11 listings, you know, Davisville 14. And a lot of those are what we call retreads. As I’ve said that, you know, they’ve been on the market since last fall, and they’re not with the program. They’re not getting it. They’re overpriced. They’re still reaching and thinking of early 2022. They have to get into the mindset in terms of we’re in a 2023 market. It’s different. The prices are different, the strategies are different. You know, you have to price it, right? You have to present it well, you have to market it and time it properly. Those are the key things.
Jeffrey:
Yeah. And even going back to the internet, the, you know, these days there’s information, there’s also tools for those, those brave sellers who wanna go it alone. But like you said, it’s more than just putting pictures on a website and, and choosing a price. You know, a as you mentioned, you know, things change. And if you really don’t have the intelligence talking to buyers on a daily basis, understanding the market trends, you, you can then be left with one of these retreads, even if you think, oh, well, I, I’m going to save myself a couple thousand bucks by, by listing it on, on one of these sites.
Patrick:
Oh, yeah. I mean, and we see that time and time again, regardless of whether it’s a good market or a down market. And, and I, I have to sort of chuckle when I see that sort of stuff. I mean, my, I was talking to someone yesterday and they decided they were going to go with someone else because it was commission based. Well, good luck. I mean, you know, you get what your paper, I mean, anybody can sell their property. I mean, I always say to people, you can put a sign on your lawn, you can sell your property. You know, you know, Joe Blow from, you know, 0.5% realtor can sell your property. But the question is, is how much are they going to sell it for? How much are you going to sell it for? You want, I mean, people look at commission and they, they think that they’re saving, but really they’re losing because, you know, a professional experienced realtor with a good program and a good system is going to get you more. It’s just, this is proven fact. It, it is what it is, right? Yeah.
Jeffrey:
Yeah. And, and like you said, with, with the current seller you just worked with, if they got a hundred thousand over asking and their property sold in a reasonable amount of time, that’s, you know, going to make up for hopefully the, the commission savings, but also the stress of having a, a product on the market, you know, that doesn’t sell. It’s kind of like putting something on one of those auction sites and it doesn’t sell, and it’s there. And then when people see that the days on market is over, you know, 30 days, 45 days, they begin to think, oh, well I can just offer a low amount for this pro property cuz they are getting desperate. Right. So you’re, you’re, you’re absolutely right. You know, you have to look at the entire picture. You may be saving on the front end, but you could be losing on the long end because in a market which doesn’t have, you know, real significant momentum, you may find yourself kind of over under thinking where you’re going to go in terms of marketing. In terms of pricing your property.
Patrick:
Yeah. Well, I, exactly, and I mean, you know, I, and I deal with this daily. I mean, I, you know, I, I had a gentleman called me in November, wanted to list his house. I pulled it up on the internet, I was out of town, and I was going to talk to him when I came back. And I was just outta town for the weekend for a, for a wedding. And I arranged a meet with him on the Tuesday, and he told me where his house was and what it was, and I pulled it up and you know, he was thinking his house was worth at least a half a million more than what I thought it was worth. And I, I told him, you know, politely that I didn’t think it was worth where he was, but we would talk about it when we met.
Patrick:
Anyways, long story short he canceled the appointment. I never did meet with him, listed with someone else, listed it at the price that he told me he thought it was worth it did not sell. It’s now with a second realtor, still too high. I had, you know, someone call me this morning and say, you know, what do you think of this? And I said, well, it’s, it’s, it was half a million overpriced. Now it’s 200 overpriced. It’s on the second realtor. And you know, the person saying, well, what if I offered him what you think it’s worth? And I said, I don’t know if he’ll take it. Because again, it’s an, an unrealistic seller. So that’s unfortunate too, right. You have to deal with unrealistic sellers.
Jeffrey:
Yeah, yeah. And, you know, we’ll, we’ll always have, you know, those type of sellers. And you know, to a certain extent there’s a kind of like, like you said, if, if somebody is, you know, determined, bound and determined to get their price, you know, they can, you know, continue to sit and sit and sit, eventually maybe something will come up. But it could be a significant amount of time. And most people real estate transaction is a very big deal. It’s a significant amount of money, and it could be a lot of stress, especially if you want to sell and you are looking to move to somewhere else, another property, you’ve have to put everything on hold while you’re still in the midst of this transaction. For a lot of people, they don’t necessarily want to tie up that much, you know, mental energy in waiting for this type of thing.
Patrick:
Yeah, no, it’s, it’s, selling a home is very stressful. And I, and I completely get it. You know, everybody’s got issues going on. I’m, you know, I was dealing with something last week. I was supposed to be listing it yesterday and ended up being a death in the family. So we had to delay. And I mean, you know, you, you get people that have financial issues and, and I completely understand that at the end of the day, it’s my job to, you know, to sort of not separate myself from that, but to separate myself. I mean, and, and explain to people that, you know, listen, you know, I understand your financial restraints. I understand that, you know, you would like this much for the property, but at the end of the day, the market will tell you what the property’s worth. And my job is to get you what market value, what market value is, and what a, a buyer is prepared to pay, and hopefully what you’re prepared to accept. So that’s, that’s kind of where I, I come into play. Mm-Hmm.
Jeffrey:
Even in the design world, you know, you become a, an expert in, in design in construction, you’re an expert in real estate, but to a large extent, you’re also a bit of a, of a counselor where you have to evaluate someone’s situation sometimes, tell them the hard truth and, and help them understand sometimes that, you know, they may not get what they want for their property, but, you know, here’s, here’s the reality of what’s going to happen. And being able to, to be able to, to do that effectively, you know, a good communicator really does help them understand the reality of the situation. So it’s not just technical or market in information or lengthen the business. You have to have all those skills together.
Patrick:
Oh, a hundred percent. Yeah. Communication is key. And I mean, it’s funny, you mentioned about some of the things that I, that I deal with and I, I, I always, I kind of joke, but I, I’m, I’m very serious when I say it, I say to my wife, you know, I’m, you know, I’m a part-time psychologist, part-time funeral director, part-time. I mean, I deal with death and divorce and, and it’s just, I’m, I’m wearing so many hats and I have to sort of, you know, be that guy that, you know, and, and communication is key. I mean, you have to be able to communicate with people and, and explain to them what’s going on in the market, but also understand what they’re going through personally and it’s very important.
Jeffrey:
Yeah. I know honestly, I’ve dealt with a few realtors and you know, as a buyer or seller, you, you really want to have a sense of how other agents you know, relate to your agent. I, you don’t necessarily want to go with the agent who always, you know, is the one that, you know, other agents don’t like to deal with for whatever reason. You know, that can affect the, the number of, of showings and, and the offers if your real estate agent is just not pleasant to deal with. And so that’s the type of thing, communication, being known in the industry, really having a reputation as somebody who is, you know, fair, honest, and really will do what they say.
Patrick:
You know, what that is, that is so critical. And it’s funny you say that cuz the, the, the property that I, that I sold last week, one of the properties I sold last week, the agent, you know, started off by saying, congratulations on the sale of your other property. And I’ve heard a lot about you and I look forward to doing business with you. And, and I think that’s key. I mean you, you, you have to have not only a reputation with your clients, but a reputation within the industry. Funny aside, and funny story couple, couple of years ago, I’m sorry to, to veer off, but this is a funny one. A couple of years ago, an agent called me, was bringing me an offer on one of my listings. There was a couple of other offers, and he was asking me about the process and blah, blah, blah, blah, blah.
Patrick:
And I went through everything with him, and I told him how I was going to handle the offers and et cetera, et cetera. And he said, thanks, I’ll be back to you. Hung up the phone. He bum called me about a minute later. And I heard his conversation, and he was telling his clients about the process and about how I explained what was going to happen and how I was very reputable and very good to work with, and very fair. Which I, I I could hear the conversation and he didn’t know that he bum called me. So it was, it was kind of, it was kind of funny. So then I hung up and he ended up bringing me an offer. He ended up not getting it, but I told him after the fact, I said, by the way, I said, you bum called me this afternoon. And I said, I heard your conversation with your client. I said, it’s a good thing you didn’t call me a name.
Jeffrey:
Yeah.
Patrick:
I said, and he laughed. He goes, oh my God, you heard that? And I was like, yeah, it was all good. But he could have easily have said that, you know, Hey, you know, this, this guy’s an idiot and you know, he’s, he’s not good to deal with, but he, he actually did the opposite. And that that was a good, that was a good good feeling.
Jeffrey:
Yeah. And, and, and you know, this is a, a side that a lot of you know, homeowners don’t really understand is what happens within the industry with reputation. You know, with, with, even when we were in a situation a couple of years ago with a lot of multiple listings, and people would try to come in and do some, you know, I wouldn’t say dirty tricks, but you know, something which wouldn’t necessarily be, you know, condoned by the, by the industry. And, you know, often those type of, of agents, maybe they’ll do well in the short term, but long term, you know, if you’re representing clients, maybe you would think twice about taking an offer from this, this type of agent.
Patrick:
Yeah. No, you’re a hundred percent right. And I mean, honestly, if you’re an agent, you’ve been in the business, you know, 15, 20, 30 years there’s a reason for that. And you, that means you’re, you’re doing something right. So
Jeffrey:
Yeah. Let’s talk about the, the vacant home tax. City of Toronto was brought in to helpfully release some homes, which, which they think are being held vacant, and they could be put onto the market to you know, relieve some of the pressure on, on rentals. Let me know what your thoughts are on that.
Patrick:
I think I alluded to it when we had last talked, obviously, but I’ll just sort of give you my, my thoughts on it now and where they stand today. I think it’s ridiculous. I think the whole process the whole system what did it cost to set this up? What is actually going to be you know, where are they going to make their money? Is this really going to work? How are they going to police this? I just think that this is not going to do anything. This is another government intervention as governments do to think they’re showing people that they’re actually doing something. Now, as of February 2nd, which was a deadline, there had been 85% of the people that had gone online and filled out the application. The, the city in their infinite wisdom has now extended it to the end of February for the other 15% .
Patrick:
Which I, whatever, I don’t get it. I’d like to see how many homes this is going to free up. I think it will have zero impact, much like the foreign buyer’s tax. I mean, honestly, they implemented that in 2017 or the foreign buyers’ moratorium. I mean you know, there’s ways around that people figure that out. You know, in the anti-flipping legislation, I mean, that’s been around anyways. I mean, if you own a property, you buy it. If you sell it in under 365 days, you have to pay tax. These are all things that have come up that the government is, is, is introducing or reinventing to make it look like they’re doing something. And at the end of the day, I, I just don’t see it having any impact whatsoever on, on housing today. That’s just my, my personal opinion, and I think that a lot of people feel that same way.
Jeffrey:
And so your advice to buyers and sellers don’t expect a massive change in prices from this legislation.
Patrick:
Well, I mean, it’s, it’s not necessarily prices. It’s, it’s, well, I mean, is it going to affect prices? I don’t think so. Is it going to affect inventory? No. I mean, are you going to get a few more properties come on the market because you know, someone you know isn’t living in it? I mean, maybe, but is this going to be the, the be all to end all? Absolutely not. I mean, there, we, we’ve got a big, we’ve got bigger problems, and they’re not short-term fixes. And what the, what the, the governments are governments are doing is, you know, making it look like they’re doing something for short-term fixes. And this is not a short term fix. This is a long-term fix. So I mean, honestly, I just, I have to laugh at some of this stuff. It’s, it’s, it kind of makes me shake my head.
Jeffrey:
Yeah, yeah. This stuff, you know, like you said, over 30 years you see stuff come and it goes and, you know, sometimes it’s just kind of brought back again. Because like you said, there’s, you know, some fundamental challenges with the GTA real estate market that probably don’t have short term fixes. And, you know, the, as a buyer or a seller, you, you can’t be waiting for these things to come and, and really fix what essentially is longer term structural issues with the market.
Patrick:
Yeah, no, I, and I agree, and I mean, that’s the whole government issue is, is, is a whole different topic. But I mean, you know, and then they’re talking about in increasing immigration and, you know, where are these people going to go? I mean, where are they going to live? You’re talking 250,000 people a year. I mean, majority of them settle in Toronto, right? Because it’s a big city and, you know, where are they going to live? Where are they going to get healthcare? I mean, that’s another whole issue. I mean, there’s just it’s actually a, it’s a sad state of affair. Yeah. And I don’t think there is a short term answer to tell you the truth. I mean, there may be little fixes along the way, and I think that’s the best they’ll be able to do. But this is a, this is a long term issue that has not been thought out. And it’s not just the current governments, it’s past governments that just ran with, you know, with everything. Right? Yeah.
Jeffrey:
Yeah. I ha I have to agree with you and you know, we’ll, we’ll see over the next couple of months as we get into the summer how things transpire, you know, with all the big macro factors, interest rates, that sort of thing. But if anyone wants to get a hold of you, what’s the best way for them to contact you?
Patrick:
Best way to contact me is through my office here on Vanderhoof at by phone at 416-322-8000. You can also email me. I’m always constantly on my phone. I have immediate access to my email wherever I am, and I’ll get back to you right away. It’s mail@PatrickRocca.com
Jeffrey:
All right, Patrick, as always, it’s been great chatting with you and we’ll look forward to chatting in the next couple of months and have a look back on, on this call and see how things have transpired. Have a great rest of your week.
Patrick:
Absolutely. And I, I, I do hope it’s as positive moving forward as it’s been over the last three, four weeks. So fingers crossed.
Jeffrey:
Crossed. Fingers crossed. For sure. Thanks again
Patrick:
Thanks. Have a great day.
Jeffrey:
Thank you. You too. Bye-Bye.
In these two charts you can see the comparison with prior years
Jeffrey:
I’m here again with Patrick Rocca who’s with Bosley real estate. And at this point in the market, it’s at June, 2022, there have been some really interesting developments that Patrick and I are going to talk about. So Patrick, maybe you could introduce yourself and what you do with Bosley real estate.
Patrick:
Sure. Good morning, Jeff. Patrick Rocca with Bosley real estate here in Leaside and Davisville. I’m a broker 30 years in the business and yeah, very interesting times for sure.
Jeffrey:
Yeah, you reached out to me last week and we usually schedule these calls about, you know, once a quarter, every six months or so, but there’s been some interesting things that have happened recently. So why don’t you catch us up on what’s been happening?
Patrick:
Yeah, I think the last time we talked was back in I wanna say February, March, but and, and things were chugging along and, you know, and the market was crazy and stuff was selling, you know, in days multiple offers crazy overing. It, it it’s changed. The shift happened, I wanna say about 30 days ago in, in, in our neighborhood anyways. I mean the outside of the city has been noticing it since April even late March. But the activity has really waned. You know, we’re still, we still are lacking inventory and there there’s a bit more than there was before. I mean, there was very, very limited inventory. But right now what’s happened is the, the activity on listings has dropped dramatically. And just to put it into perspective, I, I had a semi-detached in Davisville in late February, early March had about 97 showings over seven days.
Patrick:
A couple of weeks later I had one in Leaside and I had 51 showings in seven days. And just in May, beginning of May, I had one in Leaside as well, where I was down to 31 showings a day. So you, you can see where the activity went from, you know, 97 showings to 31 showings literally within 30 days. And but the prices were still good. I mean, those semis, all three of those semis at that time sold for record prices, but what’s happened now and I it’s almost like someone hit the light switch last week. The activities is, is I mean, I have a listing in north Leaside offers where last Monday I haven’t had a showing since wow, I never got offers. And I have, I had one last night in Cabbagetown we had 9, 8, 9 offers or sorry, eight, nine showings. And we got one offer. And you know, I have one this evening in, in Leaside, I think I’ve had six showings in a week. Huh. So it’s, it’s really changed. It’s really, really changed.
Jeffrey:
Yeah. And I’ve seen a few charts on market activity year over year change. So from May, 2021 to 22 in this one for Toronto resales, it’s down 40% with barely any new listings. So I think there’s probably a, a few factors which are interconnected, not the least of which is the inflation and interest rate hikes by the bank. But what, what are you hearing on the ground? Are you hearing from buyers that now they’re thinking that it’s a buyer’s market and they can wait it out?
Patrick:
Well, I mean, just before we address that, I mean, you’re right. I mean, you know, inflation interest rates. I mean, honestly, you know, we knew interest rates were going to go up. So I, I, I personally think that that was kind of built in and yes, inflation is real and what I think is, and, and, and I, I, I truly believe this. And what I think has really been hurting the market is the fear that the media has been putting into buyers. I mean, I just read an article last week and I actually posted it on my social media. It was just so ridiculous. It, it, it, it was from I think, better homes and garden or something talking about how, you know, we’re going back to the nineties. I mean, it’s, I’m like, wow, where, where are you getting this stuff? I mean, the fear that the media’s printing about the market, I mean, we’re still up from last year.
Patrick:
Yes, we’re down from last month, but I mean, and yes, things have slowed down and yes, the market has changed, but we’re not talking a crash here. You know, not yet anyways <laugh>, but I mean, honestly, and I, and I think that it it’s that, you know, it’s that perception that, you know, people read stuff and then they get scared and they say, okay, yeah. I mean, and buyers are saying, yeah, it’s, is it a buyer’s market? It’s not quite a buyer’s market yet. It’s, it’s, it’s a, I I’d still say it’s a seller’s market, but it’s getting pretty even. But there are great opportunities. I mean you know, you look at my, my, the listing that I had last week in, in, in Leaside and I, and I had an agent, you know, I listed that at a million, 4 29, and that would’ve sold for 1,000,007, you know, four, six weeks ago.
Patrick:
And we got no offers and I had an agent come to me, and this is the other problem, too. It’s a lot of agents haven’t been through this market before, so they don’t know what to do. So I have an agent that came to me and was talking about bringing an offer. And she was telling me that the market’s changed. Well, yeah, no kidding. And then she starts saying, she’s going to low ball because prices have dropped. And I’m like, you know, you can get this house for a better price and you could have got it for a month ago. And, you know, it’s, you know, I don’t come to me and say, you’re going to gimme a hundred thousand less, cuz the market’s changed. You’re getting this already for probably a hundred thousand less; not 200 less. So there there’s this just perception of there driven by the media and driven by inexperienced agents who, who don’t have control over their clients. And that’s unfortunate. But there are some, there are some good deals out there to be had for buyers.
Jeffrey:
Absolutely. And I think keeping in mind what you said about prices, if you look at the past three years, as you said, even in a, you know, February, March, they were high points for the, the average resale home price. But if you look even at may, like you said, we’re still up over last year, 2021. And so if people think it’s going to be returned to, you know, 2019 or, or 10 90, 90, I don’t think that’s going to happen even because there’s always going to be a gap between, you know, what you say in, in terms of what people think a house is worth and what the market actually does say it’s worth. And you know, I think we saw this a couple of years ago, you and I were talking and then there was a, a slowdown after a, a seller’s market. And people were saying that the world was ending and, you know, sellers are all going to be, you know, wishing that they hadn’t put their houses on the market and we didn’t see it. And then prices have been up 20, 30, 40% since then. So over the long term, like you said, you know, it, it really pays if you’re a buyer to think long term and not try to, you know, look at this as a fire sale trying to get a deal. Because I think that that sellers over the past couple of years, hopefully have realized that there is still a lot of value and, and people aren’t going to take 20, 30% haircut on, on what their house was worth just back in March and April.
Patrick:
Yeah. I mean, if you’re, if you’re a flipper, if you’re an investor in, in, in, in, in wanting to sell something in a year. Yeah. You, you could, you could take a bit of a hit, but if you’re in this long term, which most people are you know, you’re fine. I mean, like you said, our dips are short lived. You know, you go back to seven, 2017 when they put in the foreign tax, we had a dip and guess what came back within a few months, look at COVID. I mean, COVID, we had a complete dip and look what happened during, you know, for six weeks, eight weeks. And then all of a sudden in the midst of a pandemic, we came roared back. And, you know, if we have another little dip, it’s, it’s a great little opportunity now for, for buyers. I mean, if, if you’re selling, you have to be realistic. You have to understand that, you know, listen, you might not get you. You’re still going to get more than what you got last year than you would’ve got last year, but you’re not likely going to get this two, three, 400,000 over that you may have gotten in, in February, March
Jeffrey:
And you know, if we can see that listings come back up and there’s more product, I think that, you know, both buyers and sellers will be happy for a, a more balanced market. I, I think from a buyer’s point of view, what’s really still a bit daunting is going into a multiple offer situation or a seller that’s priced very low to start a bidding war. And if your agent isn’t experienced at dealing with this, you know, they may be advising their sellers on the complete wrong strategy for getting a house.
Patrick:
Yeah. A hundred percent. And then, and we’re seeing that now. I mean, it’s, it’s, again, you know, there’s agents that have been in the business 3, 4, 5 years, and they really don’t know what a downturn is and, and they, they, they’re not advising their clients properly. And, you know, if, if you’re on the buy side right now, you should be telling your clients that there, there is opportunity here. And you know, if you’re working on the sell side, you have to be, you know, realistic with your sellers and say, listen, you know the market’s changed a bit. And I had one on the weekend where I, you know, I got a bully offer and I said to my sellers, you know what, this is a good offer. You should take this. And they did. So I think that’s, that’s really key.
Jeffrey:
And I think that from a, from a buyer’s point of view, I was just looking at something in, in the Davisville area. And it’s admittedly one of the, the smaller properties in the market, but it’s priced significantly lower than anything that I’ve seen for months. So, I mean, is there is their agent trying to start a bidding war? Is that going to be a successful strategy? What I’ve heard is that if you can’t start a bidding war, they’ll take it off the market and put it back on and what they think they should get. But really, I mean, again from agent experience is the bidding war scenario still viable these days, if it’s looking like there’s, there’s less and less demand sorry, less and less increase in prices month over month.
Patrick:
Well, I think that that’s a strategy that has changed. And when I say it has changed, I mean, I, I, I pivoted just in the last seven days, 10 days, I mean, where I was having offer dates up until about a week or so ago. I’m actually, I’m doing one this evening and it was it’s, it’s, you know, it’s a different scenario. So that I can’t get into, but if I’m pricing now, I’m not, I’m pricing to market. I’m not pricing low. And I’m not doing an offer date, a hard offer date I’m doing offers at any time. I think that that’s the strategy that you have to go with. I mean, if you would’ve asked me this two weeks ago, I would’ve said you know, no, we’re still good with offer dates, but now I’m, I’m saying, you know, bring it
Jeffrey:
Yeah. And, and it’s not such a, a nail biter, even for the sellers, you know, in this market, not getting an offer on offer. Date is a little bit of a confidence hit. If you think your product is priced well, and you still don’t get an offer, you know, there’s, some definite some head scratching that’s going to go on in that date.
Patrick:
Yeah. I mean, and it’s yeah. It’s, it’s, it’s, it’s frustrating. I mean, I, like I said, I’ve got one on Leaside right now that I haven’t had a showing in a week and, you know, we never got an offer. Excuse me, on offer date. It was shocking. I was actually quite surprised
Jeffrey:
I mean, that, like you said, through the pandemic, we saw that sort of 10% dip in prices, but six, eight weeks later, they started to come back and there’s still the demand. And I think we’ve talked about this a number of times is that there’s just in, in this area Leaside and Davisville, there’s just not a lot of supply desirable area and not a lot of products that are coming onto the market. And so, you know, when, when buyers get frustrated 1, 2, 3, 4 times that they don’t get the, the, the right house that they’ve been looking at and kind of, you know, they’re getting close to their timelines. Things are going to move and, and people are getting a bit anxious. And so, you know, whether now buyers are saying, we’ve got the revenge on sellers, or they’re thinking that this is more of a long term trend. I, I, I don’t know what the next couple of months are going to be, whether we’ll see a return to, to more balance or not.
Patrick:
Yeah. Well, I, I think that that’s, what’s, what’s going to happen. I mean I, I don’t think it’s buyers revenge yet. But I can tell you it’s getting quite even, I mean, let’s be honest. I mean, yearly, I mean, I always say to people the best time to sell your house is, you know, February, March, early April we are into June now. I mean you know, the market does start to slow down around mid-June end of June because, you know, summer’s here people and especially more so this year people are traveling. So it it’s really hard to say what’s going to happen. I mean, it normally slows down around now anyways. So we’re not going to really know the, the real impact or effect in the market. I don’t think until fall. I mean, normally you can say, oh yeah, fall, everything comes back. It’s, it’s all good, you know, week or two after labor day and kids are back in school and the market picks up again and roars through until November, I don’t know this year. I can’t predict that that’s the problem, because like you said, the next couple of months, I mean, aside from the fact that, you know, rates are going to probably go up again and all the negativity in the press, but I mean, we’ve got summer holidays and, and people are, I know lots of people, including myself that are traveling.
Jeffrey:
Yeah. And, and I think that’s that pent up demand for getting out the city and, and not having to think about things like, you know, buying a house and moving is very, very attractive after the past couple of years. And so I, I agree, I think maybe in the fall it could be something where, it’s one or the other people are slow to get back into it, or they look at it and they said, okay, I think now in the fall, we’ve seen what’s happened over the past couple of months with, you know, inflation or, or other you know, you know international factors. And they may be, they may be ready to actually bite the bullet, so to speak and go ahead and, and purchase. So it’s, it’s very difficult, but I guess the same question back to, for, for a seller, if you’re looking to distinguish yourself to stand out in a market, so obviously fair pricing, but are there anything that they could do in terms of the, the fabric of the house of, of the yard to really help that listing stand out about above others?
Patrick:
Well, presentation is always one of the key factors when you’re selling a house interior and exterior. I mean, you know, curb appeal very, very important this time of year with you know, landscaping, good landscaping you know, it’s, I think it’s critical in interior wise. Again, it depends on the property if you know, I’ve in the past month, I’ve sold stunning houses and I sold, you know, what I would call the train wreck, so something’s going to be torn down. So something’s going to be torn down. You don’t normally do anything to it other than, you know, clean it out and, and, and do your photos and your, and your whatnot. But you know, I, I have one coming out next week in Leaside, it’s $3 million house. And, you know, we’re doing some, some landscaping, we’re doing some painting and touchups, and there’s not, there’s not a whole lot that needs to be done to this house.
Patrick:
It’s, it’s going to be beautiful. And we’re professionally staging it. I mean, when I say professionally staging, it’s not, you know, bringing in a few pieces of furniture from your garage and, and whatnot. It’s, it’s, I work with a, you know, arguably the best designer and stager in the city. And she stages all my homes that required, I mean, some homes you can’t stage, or you shouldn’t stage because it’s just not worth it. I mean, if it’s going to be torn down, it’s, it’s, it’s going to be a, a complete Reno, there’s no point in staging it, but I think that those things are really important. You know, and, and, and as you know, I mean, the things kitchens and bathrooms sell houses. So I mean, you know, I’m not talking about kitchen and bathroom rentals to go to market, but I mean, they must shine and they must sparkle
Jeffrey:
That’s, that’s good advice at, at any time. And you know, just making sure that you stand out. I, I think at least now, hopefully from the, the market point of view, you don’t just have to put a house on the market and say it’s within a certain area and you’re guaranteed to get offers. Because, you know, I, I, we always talk about this, the, the speculation of, you know, I will be in a house and I know that in three years, four years I’ll be able to sell it for more than I bought it for. You know, that’s sort of been the mantra for years now. You can almost count on yearly price increases year over year. So if you bought a property in say 2018, you know, you could sell it for more in 20, 22, that’s almost been the case, but like, we’ve talked about you, everyone needs a place to live and, you know, you, you kind of have to factor in that, along with the investment opportunity for a house.
Patrick:
Yeah. Long term, you’re always going to be ahead of the game. I mean, it’s just, it’s, it’s, there’s nothing to be concerned about. I mean, you know, yeah. It’s down from last month and if you bought, you know, six, eight weeks ago, is it down a bit maybe but are you selling next year? I mean, it doesn’t matter. I mean, the Mar I mean, we’re up, we’re still up, I think, 9% over last year. I mean, month over month, month to month, right? Like if you look at May of last year compared to May of this year, we’re up, I still think 10%. I mean, so are we going togo back to more realistic, you know, increases and, and year over year, like three, four, 5% probably. I mean, the numbers that were were happening were sort of unsustainable in my opinion, but I mean, you’re fine if you’re in this, you know, longer term and I mean, all these buyers that are worried about, you know, did I, did I pay too much? Well, no, you didn’t pay too much. You know, and, and, you know, having conversations with clients who have, you know, that have bought and sold, and, you know, I say to them, ask yourself, did the person who bought your house pay too much so it’s all relative, right? Yeah.
Jeffrey:
Yeah. And, and like you said, if you take a long term view in two years, three years, will you be asking yourself, did I pay too much? Well, history is, has said that, you know, as we’ve seen these downturns things have come back. And so I, I do think like we’ve talked about the longer term view is one which, you know, over time, like the stock market you’re, you’re going to do. Okay.
Patrick:
Yeah. I mean, honestly, I was talking to a client last week and I, and I jokingly said, listen, I bought, like, I bought several houses, but my last house that I’ve bought in the house that I’m living in now, I bought it like 12, 15 years ago. And at the time I, I was the idiot that paid the most on the street and I knew that, and my neighbor kindly reminded me of that. because I think two weeks before he paid more but anyways, long story short, my house is worth triple what I paid for it. Right. So it’s, it’s, it doesn’t matter. I mean, you, you know, if you’re there and you, and you’re, you’re not one of these builders, that’s buying a bungalow for 2 million. Yeah. The bungalow might go to 1.7, but, you know, if you have to flip it and I mean, that, those are the people that maybe could, could be, or, or will get caught but yeah, year over year, you’re always going to be fine.
Jeffrey:
Yeah. Yeah. I, I agree. Long term view, especially in these types of markets will, will be kind of the, the, the equalizer, I hope at least. And, and we’ll definitely talk about this on, on our next call. So Patrick, if people want to get ahold of you, what’s the best way to reach you?
Patrick:
Best way to reach me is through my office here at Bosley at 416-322-8000 or subsequently you can email me, I’m always on my phone mail@patrickrocca.com
Jeffrey:
All right, perfect. Patrick, it’s always a pleasure to chat and thank you for, for sharing what you’re seeing on the ground. Always interesting. And looking forward to our next chat.
Patrick:
Absolutely. Take care, Jeff, nice talking to you as well.
Jeffrey
I’m here with Patrick Rocca. And today we’re going to talk about, is there light at the end of the COVID tunnel? We’ve been talking regularly over the past couple of years and every time we talk, there’s something a bit different in the Davisville and Leaside, real estate market here in Toronto. Now, Patrick, I wonder if you could quickly introduce yourself.
Patrick
Sure. Good morning. Jeff Patrick Rocca with Bosley real estate here in Leaside and Davisville. One of the top agents in the area. And with regards to light at the end of the tunnel, I’m not sure the lights ever went off in the tunnel.
Jeffrey
Yeah, I understand. It seemed like at least in 2020, when it first started, there were a couple of weeks where there was a, a huge downturn as both buyers and sellers really didn’t know what to expect, but then, you saw, and a lot of the other agents saw a rebound in, in the market as people started to get with it and understand, that maybe this wasn’t going away anytime soon, but still, if you need to move, you’re going to have to find a place to live.
Patrick
Yeah. It’s been a very, very interesting run for the last 18-20 months. I mean, it continues to defy all odds. The prices can continue to increase. I mean, it’s just when, when will it end? I mean, and I don’t see it ending anytime soon. I mean, this is strictly a supply issue always has been and the supply is even tighter as we speak today. I mean, I’ve never seen it this tight in my 28 years in the business.
Jeffrey
Yeah. And we’re seeing a lot of that driven by a bunch of different factors. we, we talked at the beginning of pandemic about people kind of moving out of the city, realizing that they could work from anywhere. And then we saw some folks coming back into the city. But as you, you, as you say, this supply is the definitely limited, I mean, the amount of, of new homes getting constructed in the GTA is, is never a, a large amount. And especially in this core of the city, there is very few things except condos, which are in construction.
Patrick
Correct. And the government talks in their infinite wisdom about how they’ll fuel the market and, and whatnot, and they talk about taxes, and they talk…. Well, none of that’s going to help until they start building more product. And yes, condos are being built and they’re on the rise, but I mean, we need single family houses as well. It’s not a good situation.
Jeffrey
And the, the interest rates, the government bank of Canada has signaled that they’re going to be looking to increase rates to cope with rapid rise in inflation. And I think we talked about this back in the summer, you mentioned it’s never a bad idea to go out and get pre-approved just in case something happens with the rates. Do you see anything happening sort of in the short to midterm in terms of rate rise?
Patrick
I would be actually shocked quite frankly, if we don’t see a rate hike in the next 30 days I think we’re due for it in March or April and, and quite frankly, again, I don’t know what impact that’ll have on the market. So I mean, , just to give you, I mean, they’re talking about two or three or four rate hikes in a row. So let’s say the quarter point or, half a point, let’s say they add up to three quarters of a point. I mean, honestly, is it going to knock some people out of the markets? It, it, it may, it’s going to fuel people to get into the market. And, and again, there is nothing on the market, but I, I’ve been talking to a few people in, in the past couple of weeks because there is concern, about rates going up and what should people do? And I mean, our price is going to drop, should people wait? I absolutely don’t see that happening and I’ll just, I’ll use one of my recent listings on, on Millwood Road. About two weeks ago semidetached unfinished basement. We listed at a 1.399M. We had 97 showings in a week
Patrick
We sold it for 1.8, a record for a semi without an addition in Davisville. So, let’s hypothetically say that rates jump a point and you lose half of those buyers. You still got 45 buyers in the market that are looking something that doesn’t exist. and there’s just, and again, it all goes back to supply. I mean, right now in Leaside seven listings, Davisville 14, and a lot of those listings are retreads. When I say retreads, they’ve been on and off the market for the last several months. Right. Anything that’s good that comes out priced well sells immediately. So again, I don’t know if the, the, the rate thing is going to do anything. ultimately it, it always, it always does knock some people out of the market, but I just don’t see that happening.
Patrick
And I mean, I’ve been always known to be the eternal optimist, but I, again, I just don’t see it. I mean’s fundamentals aren’t there. So, I think if you’re selling, it’s a great time to sell if you’re buying. Yeah. You, you, you want to buy, I mean, you want to try and get in now, because I just don’t see it changing. I mean, if you wait, it, let’s say you waited from like November to now to buy, we’re already up 10% in the first six weeks of this year. I mean, so, I mean, you waited for what you waited for prices to rise and, it’s, it’s kind of a, a double-edged sword, right?
Jeffrey
Yeah. And, and I’ve been noticing there’s still a lot of renovation activity, construction activity within Davisville and Leaside. And I’m wondering, if given what’s happened, the people who’ve, moved out of the GTA are kind of moved out now and people are really staying put, and they’re saying, “Do I want to move if I don’t have to?” But yet there is still that demand. So, like you said, the supply is dwindling for, for these resale houses. And, people are thinking, well, I want the city and I know that this thing is going to end at a certain point in time, but I’ve been looking and I’ve got shutout of, you know a bidding, four or five times. So how am I going to be able to get the house that I want in the neighborhood that I want? So, people are really starting to ask that question. And are you seeing that people’s expectations are changing about really what they can buy in terms of buying a real fixer upper or just anything they get their foot into?
Patrick
Well, I am seeing that I’m having that conversation more. So, over the past couple weeks, I had a conversation with a client of mine last week and same sort of thing. They got a budget, 2.2 to 2.4 M. And right now, for that, you can’t get anything- it needs work. And, before Christmas, that might have been 2.0 or 2.1M. So, what I’m saying to people now is, try to tone down your expectation and get in the market, get in the location, find the house that is in a good location, and that you can work with over time and, and do the work. Because if you’re looking for the perfect house you’re going to pay. And I mean, even the non-perfect house, I mean, we’re seeing fixer uppers, like I said, selling for 2.3, 2.4M.
Jeffrey
And that’s really an interesting development. And I know that, it’s been kind of I don’t want to say the tradition, it’s been common for buyers to forego home inspections, or if you’re dealing with a, a reputable seller, maybe they’ll have a home inspection done before. So, it’s not an impact, when, when you’re advising a buyer how important is a home inspection, especially if the, the word on the street is that you’ll have to do some work on this house.
Patrick
Well, the home inspection is very important. There’s no doubt about it. And, and I think you touched on the point that most reputable agents supply a home inspection. I mean, all my listings, I pay for a home inspection. That’s just the way it is, because I don’t want to have to go through number one, it takes two, three hours to do an inspection when you’ve only got a five or six day window to market a property. I can, as a listing agent afford to block off three hours for one agent, I’m doing 30-minute appointments now, no double bookings because of COVID. So, I mean, I’m supplying the inspection, interestingly enough, as you go outside of the 416. For example, my, my buyer agent was showing some property 905 yesterday. Those agents they’re either too cheap or lazy. And I hate to say that, but they’re not supplying home inspections. I mean, I was looking I was down in Niagara region last week. And I looked at a couple houses, not one of them had home inspection, so I would’ve had to do my own, which I, I find rather bizarre. So, I mean, in the 416 the good agents are, are supplying the home inspection. And I think it’s critical. And if you have, if they don’t and you have to do one, you’ve got to do it.
Jeffrey
And that highlights an interesting situation that I see sometimes you see a real estate listing and the agent is not from the area. And I’m a little bit perplexed. I understand maybe that somebody has a friend or relative that’s maybe a operates another area, but I still think that local knowledge is, is very important because even if you’re a real estate agent, you’re licensed to sell a house, if you’re a seller or buyer, you may not be getting all the information you need about the market. Even if you do look at the comps on MLS.
Patrick
Oh, a hundred percent. I’ve always been a big proponent of being a local and hiring someone local. I mean, case in point, like I said, I was looking at some houses in Niagara region. I mean, I’m not representing myself. I’m going to hire someone who’s local, who, who, who can assist me and talk to me about values and about, what’s going on in the community. And I see a time and time again, where they hire the friend of or the cousin of the friend of the next-door neighbor. And they’re not even from the area. And you see that you see a lot of 905 agents coming into the 416 and vice versa doing listings. And I just don’t agree with that.
Patrick
And I mean, the agents that are coming into the 416 that are doing them, that aren’t from the area, and they’re not even doing home inspections. I mean, it’s just, it’s not good. It’s really not good. I mean, and I personally run into this all the time. It’s not a new phenomena. I mean, I’ve just recently in the last couple of weeks, lost a few listings because of this, because of, a friend of a friend or, it’s just bizarre are. And, and I watched the houses and I watched ’em come to market. And one in particular was in the market a few weeks ago in Davisville. And it was just not marketed properly. And it sold in my opinion for a hundred grand, less than what it should have. So, I mean, but people make decisions for a reason, right? It,
Jeffrey :
Yeah. And, and even, you’re, you’re mentioning the seller side, that may be a significant price hit, but also on the buyer side, when you’re going up against, like you said, you had 90 showings, how many offers did you get? You, you really need someone to say, is this enough? And also, how much is too much, if you go in with your best and final offer, you need someone who really has a sense of not only the, the property, the neighborhood, but also the other agent, like, what is, what is their strategy, if you you’ve ever kind of been on the other side of a deal from them?
Patrick :
Yeah, no, that’s, it’s really important. I mean, and on the buy side, I have a, an agent that works with me. She’s my buyer rep. And she’s very knowledgeable. She’s very good. She advises clients accordingly. You need that knowledge as a buyer agent. I mean, I do primarily listings, but I, like I said, I have a buyer agent. I mean, as a agent, you need to know the area. I’ve heard nightmare stories about buyers who have bought houses and their agent didn’t even know that there was a condominium going in the backyard.
You hear these nightmare stories all the time. And I mean, it, it’s one thing to, to, to try and think you’re going to make a quick buck. If you, if you go to Hamilton to show a house, but you, if you don’t know Hamilton, or if you don’t know the market, why would you,
Jeffrey :
Yeah. And, and that is another great point is that there’s a lot of intensification going on. we see it in Davisville close to the, the main streets. The city is really promoting densification because really there’s nowhere to go, but up. And so you see that the, the condos and the, the multi-families are starting to, I don’t say encroach, but they’re starting to get more common in these traditional single family house areas. And you’re absolutely right. If you don’t know the development a calendar what’s going on, your, your view may blocked by a shadow of a condo, and you may not have any recourse because that was approved under the previous owner.
Patrick :
Yep. A hundred percent. And then again, I see that quite frequently and it’s yeah. It’s not good. I do want to sort of backtrack for a second touch on one of your other points about people staying put and people doing renovations. I mean, obviously you probably see that at a bit more from your field, but I mean, personally, interestingly enough, I’m seeing a lot of renovations on, I don’t know who these people are. I don’t have clients calling me saying, “Patrick, I’m staying, I’m not, I’m not doing this. I’m not looking for something else.” I still have people that are wanting to move, but they can. Cause there is nothing. I mean, I’ve had clients in the past year, literally that had to wait for more than a year to find what they wanted because there was nothing available. Now I have heard of a few people that are doing renovations, but it’s not, I’m not seeing that right now. I don’t know if you are, but it’s not becoming a, the hell with this. I’m not getting involved in this market. I’m staying, I’m going to add on, I haven’t seen that as much yet.
Jeffrey :
I would say about 50 / 50. There’s a couple of homeowners in this area that are doing that, long term. And I think like, you, you, you mentioned they kind of are looking around and for them to get into a move up home where they’re going from like a three to four bedroom, they’re going to tack on an additional $1 million over the already, inflated sale price they’re going to get for, for their home if they want to stay in the neighborhood. So, they’re thinking, do I spend that on a new home where I know I’m going to have to do some work or do I put that money into an addition and, and kind of, re refinish or re remodel the space that I have. So, a bit of, a bit of half and half and the other half, obviously someone buys and they know they’re going to have to do work.
Patrick
I’m seeing that. I’m seeing that people that are buying and then they want to do work right away. And as you know costs of construction and cost of materials have risen drastically in the last year or two. So, it’s what used to be, you know a $500,000 renovation is now a 7 to 750 thousand dollar renovation. You know what I mean? Because of costs. So, it’s yeah, it’s interesting.
Jeffrey
And, and I think that people are, I don’t want to say becoming a little bit numb to that fact, but they’re saying, okay, I’m going, and I’m basing my addition on, spending a million dollars extra to get into a move up house. So, if I spend 800 grand, I’m doing okay, I’m like 200 less than I thought I’d have to spend, however, that is still a ton of money. And I find that when you invest so much into, with these original houses, depending on the street location, you may price yourself at the top of the market. What if you finish the renovation and you have to move, you really don’t want to be at the top of the market for a specific product.
Patrick
Yeah, exactly. Specifically at the market, collapses a bit. Right.
Patrick
But I mean, honestly, I just, I don’t know if that’s going to happen or when that’s going to happen. Interestingly enough, I was reading the Miami paper this morning Miami, Florida, and for the first time, and I don’t know how many years they actually had price drops in real estate which hasn’t happened. So, I don’t know when that’ll happen here, if that’ll happen different, obviously economics, different everything. But it’s interesting to see that it’s the first time I’ve heard of a market, that’s actually had a drop in prices, the Florida market. I follow because I have I’m invested there has been like crazy, like everywhere else. I mean, and it’s not just, like I said, many times when we’ve talked, it’s this isn’t a Toronto thing. This is a Canadian north American. I mean, prices are crazy everywhere. Right?
Jeffrey
Yeah. And there’s different strategies for getting into the market. So, you’re seeing all sorts of people tapping different ways to get in. But I think we’ve been talking for, four or five years. And I think I ask every time, do you think the prices are going to go down and you say your crystal ball is broken and fell on the floor rolled under the couch. And we honestly, on average, we have seen it in this area, in the core of the city. It just hasn’t gone down. So you, you, this is exactly what you mentioned. If you want to buy don’t hold off thinking, you’ll be able to time some sort of price decrease.
Patrick
Yeah, no, a hundred percent. I mean, I’ve, I’ve always been of the opinion. And like I said, I’ve been saying this to several of my clients recently get in the market. Once you’re in, it’s good. You can always move around or try to move around but get in because you know what you’re paying today for 1.2 is likely going to be 1.3, 1.4 in a year. So, you’re better to be in than to chase the market or wait for it to drop. Cause I, who knows when that’ll happen? Yeah. I mean the old crystal ball’s broken thing is still sort of true.
Jeffrey
Yeah. Fantastic. So, Patrick, it’s always a pleasure. If any of our listeners want to get a hold of you, what’s the best way to find you?
Patrick
Yeah. They can call me directly through my office at 416-322-8000. Ultimately the best way to get hold of me is by email. I’m always on my phone and I have my email rate connected to me. So, it’s mail@patrickrocca.com.
Jeffrey
All right, Patrick fantastic chatting about where we are, and I know we’ll chat again soon and good luck with the rest of the spring market.
Patrick
Thank you, Jeff.