Patrick tells us about the unprecedented changes he has seen over the past few weeks in the Toronto Real Estate Market due to the Coronavirus pandemic.
Speaker 1: I’m here with Patrick Rocca to talk about the Toronto real estate market in these unprecedented days. Now if you’re listening to this later, this is during the COVID-19 pandemic. And so a lot of the activity that we’ve seen in a typical real estate is typical spring real estate market has just not happened due to the lockdown. Now Patrick is going to tell us a little bit about what this means to both buyers and sellers and why we’ve been using the words unprecedented, but Patrick, maybe you could introduce yourself a little bit.
Speaker 2: Patrick Rocca from Bosley real estate. I’m one of the top realtors in the Leaside Davisville area of Midtown market. And my office is located on Merton street in Davis.
Speaker 1: And we were just chatting briefly about what the lockdown means in terms of family and honestly, maybe real estate isn’t top of mind for people right now as they’re looking at just the basic things about health and keeping their distance. You know, maybe if they’re going to have a job and the recession, all that stuff is really weighing heavily on people’s minds. So in terms of observing the market, can you let us know from the ground what you’ve been seeing out there?
Speaker 2: Well, it’s you know, to use your word, it’s definitely unprecedented times. We’ve in the last, you know, four weeks, five weeks, since the market has drastically changed we were heading to what was going to be expected to be a maybe not record setting, but extremely busy spring market. That sort of pause just before March break, right around the time when COVID started you know, gearing up and taking serious measures in the marketplace. It just literally screeched to a halt around the mid-March timeframe. And we were doing very, very, very good sales, good prices not much supply, ton of demand, multiple offers. And it just halted literally, honestly, it was like overnight. And I remember vividly because I went to Florida for March break on the, on the 12th in the morning first thing. And on the 11th, I started getting some creepy feelings about, you know, what was, what was the head and not knowing here I am a month later, the serious repercussions of what was happening. My concern at the time was, you know, was I going to be able to go to the, the Miami Heat play on the Saturday night.
Speaker 2: That of course got canceled along with all the sporting events and the world changed. I mean, and it was changing and it still is changing daily. I mean I remember arriving on a Thursday, I had to get Thursday, Friday, Saturday, Sunday and then Monday there was a real, I mean every day there was a realization that this wasn’t going to be bad and then Monday it really kicked in. This is going to be really, really bad. And we decided to head home with it early and all of a sudden we had the stay at home put in place. And the markets basically come not necessarily to a screeching halt, but pretty much the screeching calls look at month over month statistics that just came out the day before yesterday. You know, listings are down approximately 60%. Sales are down, possibly 70%. Showings are down about 80%. That being said there, there are still some sales taking place.
Speaker 2: Specifically in the, you know, the lower entry level market under a million. We had one this week in East York where we had clients very interested in it came on the market. We talked about the day it came on the market. I went to book an appointment for the following day and had already sold for over asking. So there is, there is stuff happening in general we have certain restrictions that we have dealt with regards to showings. We cannot do open houses. Been advised in terms of the social distancing you know, obviously know person to person contact. So it makes it difficult if people are living in a house. And buyers quite frankly are really out there looking cause they’re concerned with personal contact unless there’s an urgency and the urgency is maybe they sold and they have to buy or maybe there’s a financial situation.
Speaker 2: Those are the only listings that I’m looking at right now. Anything that’s vacant I’ll take on right now and I’m advising people if you specifically, if you’re in the lower end market, you know, get your home in the market because you know, prices are down. I mean we’re, we’re, we’ve already seen the ticket prices in the last 30 days. Right now I’m going to say it’s a good 10%. And there’s talk that it could be, you know, Bloomberg put out an article, there’s talk that it could be 30%, but you know, by the end of the year, I think that’s extreme, but I could definitely see somewhere between 10 and 20 for sure. So if you can sell now and your property is vacant or you’re thinking about, maybe I should hold on, you know, I put it on the market now if it’s banking and don’t have to risk and take in terms of health, because I think as days go on and weeks go on, it’s going to get worse. And who knows when we’re going to get back to any sort of normalcy.
Speaker 1: A couple of things I want to touch on. Real estate is one of those industries that is a little bit difficult to take completely online. I know that a lot of folks are working from home now using Zoom to do conference calls, but real estate is one of those things where you almost want to be there in person. You know, virtual tours are great and pictures are great, but it’s one of those things you want to get the vibe of the house. So I know that that’s been extremely difficult for the whole industry to kind of get their minds around. And the other piece you talked about is, you know, holding off and I recall back in 2008, 2009 during the financial crisis when the first sort of four to six weeks, people just, they were, they just did not know what the future is going to bring.
Speaker 1: And so there was this real suspension of pricing; suspension of understanding what the market rules were. But then as we got a grip on what was happening things did decline quite significantly, at least in the stock market at that point. So I agree with your, your, you know, comments to buyers, you know, if you can’t sell, if it’s vacant, if you can do it and you need to sell, sell now because once people really start to get their head around it, I agree that I think prices are going to taper off because people just don’t want to see houses. This is going to be in their mind for four months if not years.
Speaker 2: Yeah. And we don’t know, you know, when it’s going to come back. And when it does, you know, when we get back to some sort of normalcy in terms of the market is in view and houses, how many are going to come on the market? I mean, I know that I’ve got several sellers that are chomping at the bit who have to lead because of the fear of coded and people in their houses and you know, whatnot. So like a lot of houses. I mean there was always, you know, a lack of supply and a ton of demand. But now the question becomes how much of that demand is now lost because of people who are unemployed financially hurt because of COVID? How many of those people have you lost from the market? So it’s, it’s trying times it, and it’s, there’s no formula here for how to, how to come out of this because it’s just like you said, numerous times, it’s unprecedented, right?
Speaker 1: And a lot of the drivers which are powering the Toronto real estate market may not be there in, in great extremes in the future. Things like, you know, immigration, things like foreign money coming across, people are really going to re-evaluate in the post COVID era. A lot of the things that they thought were going to be true, you know, easy air travel you know, being able to, to live in a city, in, in close proximity to, to services, you know, is that as desirable? Are people going to return to what was normal, you know, even like two, three months ago. So that’s a big, big question mark. And folks that are selling have to think about, you know, what is it going to look like? Postcode are the same drivers going to be in place?
Speaker 2: Yeah. And it’s an unknown. I mean those are all valid and can very good points and we won’t know until we come out of this and it’s going to be a, it’s going to be you know, they, they talk what the curve, well this is going to be a curve as well. It’s gonna be a learning curve and you know, what, how will this impact our market? I mean I, I’m always looking glass half full type of guy. So I’m optimistic that we will return to a healthier market, but it’s not going to be normal. And I don’t know if anytime we’ll get back to normal, I mean the things are definitely going, going to be different.
Speaker 1: Yeah. And, and one thing which I think is interesting in looking at it from the commercial real estate perspective, a lot of folks are now looking at working from home and thinking about is there a need to go into the office seat five days a week, you know, commute you could drive that sort of thing. And you know, is that something which you think will start to influence the residential market? Are folks now going to say, well, you know, working from home now, maybe I need to have an office or, or at least some sort of spaces, multipurpose that I could work from home if I need to.
Speaker 2: Yeah, it’s gonna change a lot of houses. But I, I agree. I mean, there’s going to be definitely some habits. I mean, I’m, I’m not a stay at home type of guy. I’d be crazy to stay at home and whatnot. My business is such that you have to go out and interact with people and whatnot. But yeah, no, I think those are very valid points, very valid points. And I, you know, I just, we just don’t know. It’s just so uncertain. But you know, interesting times.
Speaker 1: Definitely. So we talked a little about sellers, you know, what they should look for at least in the, in the short term is the, we kind of navigate this uncertainty if you’re a buyer and you’re a buyer in the sort of entry level to mid-level home in the Leaside area, what should you prepare yourself for?
Speaker 2: Well, if you’re a buyer right now in this, in this market, and if you’re looking, I mean like a house as I told you the other evening that I had clients that were looking at it that sold the day that it came on the market that should have sold for more it sold for 50,000 over asking. I thought that it was gonna sell a hundred plus over asking. So there are use out there if you are a buyer in entry level homes, in my opinion, because prices are off. If you’re buying and selling in the same market, I had a conversation with a client of mine last evening who’s looking at, you know, buying something that she’ll be able to get a good price on that. But now look at his house and selling it, we get as much as could have got, you know, pre coded. Probably not, but it’s a wash.
Speaker 2: I mean, if you’re buying and selling in the same market, it’s typically, it’s typically a wash. But there are entry level on this home was in East York and you know, even houses on a price rate right now are selling. Yes sir. You know, if the, if they present themselves well and if they’re marketed properly in COVID times, because as you said, you know, we’re looking at videos now, we’re looking at three tours. We’re looking at different ways of marketing homes, but they’re not selling to what they were. So from a buyer’s perspective, that’s, that’s good news.
Speaker 1: Yeah. And I know that those are the type of things which a lot of folks are looking at in this neighborhood in the higher echelon, you know, in the plus two plus market. Are you seeing any changes there?
Speaker 2: Well, the only changes I’m seeing is, I mean, quite frankly, they’re just not moving. I mean, I, I was working with just yesterday that you know, at least I didn’t Davisville and there was approximately 20-ish listings in each, each market. And more than half of those were over 2 million and they had been sitting for, for long periods of time. As a matter of fact, several of them were on the market, pre COVID and again, they probably weren’t priced right, but definitely now and in the middle of this crisis, definitely not moving because they’re overpriced. So again, I think it all comes down to pricing if you can price it right. I think that higher end market, that’s where there’s going to be an impact. I think when things start to come back. I mean, you know, you look at the buyer, the buyer, the buyer for that, she’s typically, you know, someone who’s got money invested in the market, the market’s down. I mean, there could be a ripple effect on that market.
Speaker 1: Yeah. And I know that that’s a type of market which is often influenced by speculation and it’s neighborhood. You see a lot of retrofits, a lot of remodels or complete new builds. And we talked previously about some of those builders, investors looking at their pricing and being very resistant to change. And a lot of times getting in at at the peak or at least near the peak in terms of land value, what they’ve paid to construct it. They’re kind of really against the wall in terms of what they can reasonably expect to, to get back on their return for, for those properties. And a lot of them in this neighborhood are those Bill’s builder homes. And like you said, they’ve been even before COBIT, they were sitting on the market for, for weeks.
Speaker 2: Yeah, I was talking with a builder yesterday, but I’m going to give us them the home and even a good position bought his property a couple of years ago to, to rebuild so he doesn’t have to worry about heavy bought high and trying to sell high. But I mean, you know, they still always want top dollar for their property. But I met with a gentleman for before Christmas and you know, we talked about his property and the values and whatnot. And you know, I encouraged him to get on the market sooner than later. And you know, he ends up listening with his friend, of course, and they came out higher than they probably should have. And now it’s still sitting there. And he was at least 200,000 overpriced when he came out. Pretty COVID. Now he’s probably 400,000 overprice. Yeah. So, cause we’ve taken a, let’s say, a 10% hit, right? So I think those builders that were five weeks ago, no, the way behind now, and it’s, it’s not, it’s not pretty it with some of the numbers and I talk with some of these people and you know, they’re not making money on a good day. Right. So it’s, it’s a tough, tough market. I think that’s where you’re going to see a ripple effect.
Speaker 1: Yeah. And the, the, the, the challenge again is that, you know, some people may be saying, Oh, well I’m gonna wait because I know there’s going to be bargains out there in, you know, a couple of months and you know, the people are going to say, no, I’m going to hold because I don’t want to sell at a loss. And so you’ve got this sort of disconnect that’s building up in the market. And like you said, we just, we don’t know how long this is going to be. We don’t know the impact because it’s more than just financial. There’s just ripple effects everywhere. And it’s definitely, it’s a challenging time. And you know, if you are either buying or selling, I would say get the benefit of somebody with experience to guide you on this, in charge in these uncharted territories. You can’t just be saying, well, I’m going to put it on for what I think it’s worth because it’ll sell no matter what. It really, I don’t know.
Speaker 2: Yeah. You’re, you know, you’re 100% right. And an interesting, you brought that up about the, you know, the buyer’s thinking that there’s going to be more bargains in the sellers thinking, Oh, maybe I’ll hold on for a while longer because prices will come back. I’m already four weeks into this, having that conversation with buyers and sellers. So it is, it is interesting times for sure.
Speaker 1: Fantastic. Well, we’ll definitely connect in the next few weeks to see if anything has changed, but for now, if anybody does want to get a hold of you, I know you’ve been in the business for over 26, 27 years. Is it now?
Speaker 2: Nope. Yeah, that’s about 27 years though. I think this is my 27th year.
Speaker 1: Time flies when you’re having fun. It sure does. If folks do want to get a hold of you, what’s the best way for them to do that?
Speaker 2: Yeah, the best way is to call me directly through my office. 416-322-8000 or email is always a good way to get hold of me. firstname.lastname@example.org
Speaker 1: Well, great. Patrick. best wishes for the next few weeks. Stay safe. And I know that when we talk again, we’ll have a lot more to talk about
Speaker 2: And I hope it’s all positive. Thanks, have a great day.