Patrick Rocca Bosley Real Estate on the Spring Real Estate Market

 

In this interview, Patrick Rocca of Bosley Real Estate, notes that the spring real estate market is starting out with a lot of activity as there is still a lack of product on the market.

Interviewer: Hello Patrick. In a nutshell how is the market so far?

Patrick: …brisk. Very, very active. I’ve been in this business for 20
years, I’ve never had a bad spring. I’ve had a few wonky falls, and by the
looks of it right now, we are again into a very, very good spring market.
Prices, again, are rising. There is literally no inventory, so you’re
seeing multiple offers right across the spectrum. And when I say across the
spectrum, from the six, $700,000 thousand homes, I mean there was a
property in the west end that had 32 offers a few weeks ago. I had five on
one of my listings in Leaside last week, sold for 120 over asking.

And we’re seeing it right up into the high end. I was interviewed for a
Global Mail article last week and it talked about actual high end homes,
the “luxury” homes are moving as well. Two homes, in the two million plus
range, in the past 14 days, that I’ve had multiple offers on both of them
and that’s very, very rare in the high-end. So, in general, I’d say spring
is looking very, very good.

Interviewer: Have there been any changes over the past number of months
that you’ve seen that affects the mid to high end properties?

Patrick: Well, I mean, not really. The mid range homes have always been
very active. It’s simple economics. No supply, ton of demand. So those
homes are flying off the shelf. Where we’ve seen it change in the earlier
part of this year, if I could say there has been a change, is the desire
and the need and the appetite for higher end homes. That sort of died off
in the fall. We had a bit of a blip where homes were sitting, anything
above 1.5, up to the 2.5 range, in the Leaside-Davisville areas, were
sitting for months and there was very little action, although there was a
bit of a blip in late November.

But, in general, the high-end was very, very quiet. That’s different now.
We’re seeing high-end homes are moving. Even high-end… I sold a luxury
penthouse, a condominium downtown, last week, for over the million dollar
mark. So even that market is very robust. Why is that? I think there’s some
more confidence out there, personally. That’s what I’m seeing.

Interviewer: What about some of the drivers for the condo market? I
know we’ve heard there’s going to be a condo slowdown because of
overbuilding for what seems like years now. Are there any trends that you
see in the mid to high-end condo market?

Patrick: Well, yeah, the old “the condo market’s going to crash” has
been going on for seven or eight years. The old is real estate a bubble, is
it going to burst, sooner or later, something’s going to happen. But I just
don’t see it right now. Specifically in the stronger markets. When I say
the stronger markets, you know, the mid-town, places that aren’t over-
built.

If you go south of Bloor, down by the waterfront, Condo Alley as I call it,
there are so many properties. It’s more of a buyer’s market down there. But
they’re still selling. When you get into the mid-town area, it’s tough. I
have a client right now who emailed me last week and wants a two bedroom
for 400 thousand. They just don’t exist in mid-town. You’re lucky to get a
one bedroom for 400 thousand. So that, again, there’s lesser inventory in
the four, five, six, $700,000 condos mid-town.

Interviewer: Now some of the drivers for that used to be speculation. I
remember back in the late 80s, early 90s, there were a lot of speculators
who would buy condo properties with no intention of actually even occupying
them. They would just go straight to rental. Are you seeing that with some
of your clients being investors rather than owners?

Patrick: My clients are specifically owners. They’re people that are
either moving down from a house to retiring, they’re moving into the city.
It’s a lifestyle. I don’t necessarily deal with that “investor market.”
There’s a big Asian market for that. We see that, again, more predominantly
downtown. You’ve got condos. I just went to see a client yesterday to list
their condo and they’re in a solid location and there’s not a high
percentage of rentals in that building. Well if you go downtown, there are
some buildings that are 60-70% rented. That effects value, to the negative.
If you’ve got speculators and people aren’t living there, they’re just
renting them out to students or whatever, it does impact value. But we see
that more downtown and it’s not traditionally my market. It’s more foreign
money.

Interviewer: OK. Good. Shifting back to the housing market, if I’m a
buyer in the mid- to high-end properties, what should I be looking for in
this spring market in order to realize actually getting the home of my
dreams?

Patrick: Well, if you’re a buyer, it’s a tough market. It’s, again, a
seller’s market. If you’re looking in the mid range, and I hate to say
this, but the mid range right now in Leaside-Davisville markets, 600-700 to
a million to two million, three, be prepared for multiple offers. Be
prepared to get into a bidding situation because there are a lot of buyers
out there that are looking for properties and there’s not a lot of
property. At the higher end range, you’ve got more wiggle room. The 1.5
million plus, the homes, albeit they’re selling, more than they were in the
fall, they still sit for an extra couple of weeks and you do have some
leverage and some flexibility in terms of negotiating with the seller.

Interviewer: Now, that being said, from a buyer’s perspective, if I’m
moving into that 1, 1.2 area and I’m encountering a lot of resistance in
terms of multiple offer situations, do you ever get into a conversation
with your client that says maybe it’s better to actually do a renovation
than to do a move?

Patrick: Absolutely. Yeah,  I deal with that quite often, as a matter
of fact. I talk with people about whether they should stay, renovate,
and/or move on to the next one. Take their equity out and buy something
else. I mean, there’s a lot of things in play when you’re dealing with
that. Some people have bought their property ten years ago for 400
thousand, 450 thousand.

So from an equity standpoint, just as an example, I met with a client this
week up in Davisville. They paid under 600 for their detached two-story
back in ’08 when the market sort of tanked. The property today is worth at
least nine. They’re thinking of putting on a two-story addition and so if
they were to do that to the tune of maybe $250,000 that house that is nine,
ten today would be worth 1.2, 1.3 with that addition. So they’ve already
bumped up their net worth in terms of value.

The downside to doing a renovation, which I do run into, is that some
people just don’t have the stomach for it. You have to move out. You have
to rent somewhere. There’s always delays. So it’s personal preference. I
get about 50% people that will do it, then 50% say, “To heck with it! I’m
going to take my equity out and buy something done so I don’t have to deal
with it.” It depends on lifestyle.

Interviewer: Yeah, absolutely. We get a lot of that frequently with our
clients in terms of counseling them. Again, we are involved with some
people who do want to increase the value of their property by doing an
interior job or, like you say, addition on the back, and we help them in
terms of figuring out what that means in terms of their lifestyle.

Absolutely, you do have to be ready for it, but there are systems and
processes that we put in place to help them along the way. So that
definitely becomes a viable option, in terms of staying in the GTA. So,
final question. In terms of buyers and sellers becoming more educated with
the Internet, has that changed the way you do business as an agent?

Patrick: Let’s face it, the Internet’s been around for a while. And if
you don’t have an agent, the web presence or if you’re not actively
promoting and marketing your properties on the Internet, you’re behind the
times. Every agent has a website. But it’s what you do with that website
that makes a difference.

If you look at my website, personally, I’m not just blowing my own horn
here, but on my website I do a lot of search engine optimization and I do a
lot of social media. Video content. I do stuff with my website. I get
tremendous page hits. I do a lot of community stuff on my website. So
people go to my website for resources outside of real estate. Yeah, the
internet has obviously changed things. So you have to have a presence.

Interviewer: Well, thanks again, Patrick. Best of luck this year in the
busy spring market and we’ll be talking to you in a couple months to find
out how it’s gone.

Patrick: Excellent. You have a great day. Thank you.