Jeffrey: Hello everyone. I’m here again with Patrick Rocca of Bosley real estate, and at this time in September 2024 we’re going to talk about some really interesting things happening in the midtown Toronto, real estate market so before we get into it I’m going to ask Patrick to introduce himself and what he does.

Patrick: Good morning, Jeffrey and thank you for having me again. Patrick Rocca with Bosley Real Estate located in midtown Toronto in the Leaside area. Looking forward to giving you an update.

Jeffrey: Fantastic. Now, I think we’re a bit of an interesting point because we’ve seen a higher interest rate environment. And for the last sort of 18 months, I think it’s affected the market coming out of that very very low interest rate environment that we had for a number of years.

Jeffrey: And at the moment we’ve seen the Bank of Canada cut rates a couple of times and just last week the US Federal Reserve, cut their interest rate by a half point. So, Patrick, have you seen any differences in the real estate market over the past sort of six to eight weeks.

Patrick: Yes, I have. Let’s just talk about pre September. I think we last talked in the spring. Spring was a very good market.

Contrary to what some people will say, the high end was a little tougher. Leaside, Davisville, stuff in the, you know, under 2.5, 3 million stuff was very much moving. Even through the summer, the product that was under 2 million, the semis, the bungalows, that stuff was moving, although there was a lot less of it.

Where it was very stagnant was in the upper part of the market during the summer. With the rate decreases, have we seen more activity? We’ve seen more mental, people mentally now are feeling a little better because they feel that we’re coming out of this. So, I mean, yes, I think, you know, with rates, with the first time buyer program that they updated last week, we’re going to start to see that more so now, I believe.

It is kind of a catch 22 because when you’ve got interest rates coming down, it typically means our economy sucks. And so, but, and there are parts of our economy that are not great. When you look at the U.S., it’s the same sort of thing and they’re in the same boat.

They decreased, you know, half a point last week and it had a positive effect on the stock market. But in terms of real estate, we’re seeing people come back into the market. I think it’s a little too early for the first time buyer one.

The interest rates, I think, and I’ve said this before, I mean, everybody keeps saying, well, should we wait until the next announcement? Should we wait to list until the next announcement? Should we wait to buy until the next announcement? Well, you know, every announcement is going to go down. So, the question is, is the next one, is it going to be 0.25 or 0.5? And, you know, in the meantime, properties are selling and prices are going back up. So, you’re waiting for rates to come down a little bit, but are you losing on the value of property increases? So, again, it’s kind of a catch-22.

I think it’s a good time to buy. And I also think it’s a great time to sell as long as you’re realistic. And, you know, I’ve said this time and time again, the realistic sellers that are priced right will sell.

Albeit, interestingly enough, we’ve had a few hiccups in the last week or so that I’ve noticed in the market where stuff that’s priced right hasn’t sold. And then stuff that you look at that you think, wow, I don’t know if that’ll sell, it sells. So, it’s kind of weird.

I mean, I started off the fall gangbusters. I mean, like last week, I did like five deals or something. It was crazy and good, solid pricing.

And this week, kind of a little weird. So, I don’t know if it’s just week to week. But the general consensus is there’s more positive thought in the market amongst buyers and sellers for that matter.

Jeffrey: Yeah, that’s good. And it reminds me of driving down one of the main streets in Leaside. And I noticed you had a property listed. And two or three doors up, there was another property that’s been listed for a while longer. I won’t name the realtor, but it has a green sign.

Patrick: Well, I think it’s just what I alluded to earlier.

I was at $1,599,000. I think the one you’re in question about is close to $3 million. So, different price points, different buyers.

The $1,599,000 sold for $1,599,000 immediately, like literally in one day. So, again, under that $2,500,000, there was another one. I think if it’s the same street we’re talking about, there was another one on that street that sold for over asking as well in a week.

Again, it was in the $2,500,000 range. So, once you get above the $2,500,000-$2,500,000-$3,500,000 range, it starts to be a little more dicier. And a lot of those are as well.

I mean, when you look at the $3,000,000-plus range, a lot of those are the newer builds. And those are just flat right now. The new construction, the modern stucco renovated homes, they’re sitting for various reasons.

Number one, the price point. Number two, a lot of them are still overpriced and people are not pricing properly. So, yeah, I mean, again, that situation, I think price point again.

Jeffrey: Yeah. And there’s obviously, you alluded to some interesting buyer psychology there. And for anyone that’s thinking about taking on a mortgage for property, obviously over seven figures, you’re thinking, okay, well, if I can kind of squeeze another quarter point, half point, I’m going to save myself X dollars in interest payments over whatever the term of the mortgage is.

But I think you brought up something very, very interesting. If people have been looking for a home for a while, and it takes them a while to find the real home that they like, that’s got all the attributes and features, isn’t that worth it to make sure that you get the right home?

Patrick: Yeah, a hundred percent. I mean, it’s all about, you know, what suits your needs and what you’re looking for.

And I mean, you shouldn’t just buy something, especially real estate. It’s not like buying a loaf of bread. Because you think it’s a good deal.

I mean, it has to suit your family needs, your personal needs. There’s all sorts of things that it has to fit. And you’re right, if you wait an extra month or two and rates go down or rates go up, so be it, right? It’s more important to find the right property.

And I say that to clients all the time. I mean, when they’re considering offering on a property, I say to them, well, I mean, if you’re uncertain about buying this home, I mean, ask yourself the question, if it sells tonight, would you be upset? And if they say no, I’m like, well, it’s not your house, right? Move on. Let’s get you another one, right? Yeah, a hundred percent.

Jeffrey: You’re absolutely right. It is very emotional. And it’s something that, you know, it incites emotion regardless of whether you’re buying or whether you’re selling.

So, I mean, it’s a different asset for sure. So, you know, when you look at the property after you buy it, a lot of properties, especially in this neighborhood, are older. You know, they may need some sprucing up from, you know, small renovations to larger ones.

And that can really affect what people are willing to get into. You know, obviously people want to move in and not have to do anything. But the reality is that depending on their situation, they may actually have to do something.

And then you’re talking about, you know, a certain number of months or even years of not necessarily getting to the point where you’re comfortable living in that house.

Patrick: Yeah, you nailed that. I mean, you’re a hundred percent correct. I mean, you know, and again, if you look at properties individually and price points, I mean, case in point, I have a listing right now, a semi with an addition in South Leaside, and it’s got an addition. And it’s listed for $1,399,000. And the comments, feedback I’m getting are, well, you know, we need to do some work on the main floor to open it up to make it more our style.

And I’m like, well, yeah, that’s why it’s listed at $1,399,000. We sold one last night for $1,575,000. So, if you want to put $100,000 into it, great.

That’s why it’s listed at $1,399,000. And a lot of times, you know, people will look at a property and say, well, it needs too much work. Well, they got to look at the price.

And if it’s priced according to the market, you know, you can buy that, fix it up, and you’re still ahead of the game, right? Exactly. And, you know, obviously, that’s where you would come into play. I mean, you know, if you’re looking at a house that’s priced at $1,399,000, that’s part of the game. So let’s talk to a designer, let’s talk to someone like yourself, let’s talk to someone and get an idea, because if you pay $1,399,000 for something, put $100,000 or $150,000 into it, you’re still ahead of the game.

Jeffrey: That’s really good advice, and I think that like we’re talking about, for most people this isn’t an investment which they’re going to flip. We don’t tend to talk about builders when we have discussions. It’s mostly individuals, families who are really buying a house to live in, not to make a pure investment or a flip. So in that case, you’ve got to look at your time horizon.

Most buyers have a time horizon which is more than a couple of years in a home, and in that time, you can do a lot. Even without spending a ton of cash, you can do stuff like paint, landscaping, fix up some of the smaller things to really make it your own. Then maybe when you’re ready, you can do the larger projects.

You don’t have to do it right before you move in.

Patrick: Exactly. You don’t have to do everything all at once.

You can do things over time, and that’s probably a better way to go, especially for a first-time buyer or someone who’s just getting into a home as opposed to a condo.

Jeffrey: Yeah, and great segue. You’re talking about the condo market. From what I’ve been seeing over the past couple of months, it’s been pretty flat, and I’m wondering if you do much in the condo space.

Patrick: Well, I do, and I’d say 10-15% of my sales are condos. I mean, there’s more houses in Midtown than there is…well, I shouldn’t say that now.

The condos are popping up everywhere, but I tend to concentrate more in my neighborhood directly on the east side. There’s more homes than condos. But interestingly enough, I have two condos that I just recently listed, both last week.

One sold in two days, and the other one, I haven’t had a showing, and it’s just perplexing. I mean, the one that sold in two days, I was quite surprised. I mean, I figured it would take a week.

It’s a good building. And the other one, the fact that I haven’t even had a showing, I scratch my head because the building is a good building. This is a good unit.

It’s got two parking spots. So the condo market, in general, if you’re talking south of Bloor, it’s in the crapper, especially the new stuff, the pre-con. All that stuff is bad.

Established buildings are still good. So if you’ve got an established building, even if it’s downtown, you should be okay. Is it going to fly off the shelf? No, you’ve got to work it.

Midtown, again, Midtown, you know, you look at the property that I sold in like a couple of days was on Mount Pleasant. Good building. You know, in our area, Kilgore Estates, you know, Sherwood, Huntington, those buildings are selling at their price right.

But again, like I said, downtown is a bit of a train wreck.

Jeffrey:  Yeah. And I know that some of the folks I’ve been talking to, they’re wondering about the value of some of these new builds, whether it’s pre-con or just, you know, newly completed.

The sizing of the units, obviously they’ve been getting smaller over time for the past 20, 30 years. So, they’re, they’re looking at one bedrooms, you know, that are 600-ish, maybe 650. And, and they’re saying, you know, my goodness, I can get, you know, bigger apartments, and, these 1960s apartments are much bigger than that.

Have you been hearing a lot of that in terms of value from your buyers?

Patrick: Yeah. I mean, people that have bought in pre-con, like within, I think if you go back to 2019, that was kind of a cutoff. If you bought like 19, 20, 21, and you’re just closing now, you’re, you’re worth less than what you paid.

And the reality is, I mean, I’ve had several conversations with several clients who have closed recently, and I’ve told them both, just walk from your deposit. I mean, you’re going to lose less if you walk from your deposit.

Jeffrey: Wow.

Patrick: Yeah, it’s, it’s, it’s not good. But yeah, on the other hand, I mean, resale, good established buildings, you can get bigger square footage, and you can get a good price on those as well. And you’re not paying, I mean, a lot of these people that bought pre-con, they’re paying huge, you know, 12, 13, 1400 a foot, right? It’s not worth that now, right? You can buy a resale for, you know, 850 to 1100.

So if you can get a bigger unit, right?

Jeffrey: Oh, 100%. And I, you know, in our neighborhood, there are older condos, I’m thinking of one that’s just on Merton Street, near Yonge Street, it was built, I think, in the late 80s, early 90s. And, you know, it faces the Mount Pleasant Cemetery.

It’s on the south side, it’s got fantastic views, big suites. And from talking to some of the folks who live there, apparently, once you get in, you never move because the quality of the space is so good. And I think that those are kind of hidden gems in the market.

And like you said, resale, you’re getting a lot of value for your square foot.

Patrick: 100%. And I always tell people to buy something established. Merton Street is a great example. It’s a great strip. I love the condos on that strip. Especially ones facing the cemetery. I mean, a lot of people don’t like that. But that’s a park.

I mean, people talk through there, they bike through there. But yeah, I mean, we always try to encourage our buyers who are downsizing to buy something that’s already established. To stay away from the pre-con, to stay away from the newer stuff, because you’re getting better value, bigger square footage.

Jeffrey: And, you know, to a certain extent, you know, they’re never going to build on Mount Pleasant Cemetery. So your view is not going to get interrupted by, you know, another condo going right beside you.

Patrick: Yeah, exactly. Exactly. And, you know, for a condo, you know, I know there’s folks who want to live on the ground floor, but if you’re looking for those attributes, like a fantastic view of the city, those are some of the key selling points if you ever decide to sell it in the future.

And if you know that that view is not going to be impeded, you know, that’s a certain amount of security or peace of mind that you’re going to have about the value of the unit.

Patrick: Absolutely. Yeah, no, it’s spectacular.

Those south-facing units, they’ve got a spectacular city line view and they’re good buildings. They’re well-managed buildings and your proximity to, you know, the subway and all that. It’s a great, great location.

Jeffrey: Yeah, absolutely. Absolutely. Final thing I’ve noticed there are, and I think you alluded to it earlier, there are some units and houses which are sitting forever just up the street from where I live.

There’s a few that were listed. One was listed very, very high and they eventually took it off the market because they weren’t going to get that price. The other one has been sitting for quite a while and it’s priced just above a house which sold about a month and a half ago for, I would say, $90,000 less.

And so I think it’s interesting. Again, I know that the real estate agent that’s selling that is not local. It must be, maybe it’s a family connection, that sort of thing.

So, you know, not knowing or not being intimately familiar with the market, being able to market, have the connections within this area, I think is actually hurting the sellers. Can you talk a little bit about that?

Patrick: Yeah, there’s a lot to be said about that. I mean, it’s like, you know, why would I go to Oakville to list a property, right? I mean, we have a property in our community right now where it’s listed by a Burlington agent.

I mean, like, who does that? I mean, it’s just not, I mean, and it’s not just that property. I mean, there’s another one that’s listed by an Oakville agent. I mean, number one, I would never do that because it’s not a good service to my client.

I don’t know the Oakville market. I don’t know the Burlington market. I would refer them to a very reputable agent in that area.

And, you know, I don’t know how people, you know, a lot of agents are desperate. They’re not doing business, so they’ll go anywhere for business. And quite frankly, they’re not doing their clients any justice.

They’re overpricing their properties. The two in particular that I’m talking about, and, you know, they’re in the Midtown area, both overpriced. And no kidding.

If you like, if I went to Oakville, I wouldn’t, I wouldn’t know pricing. I mean, so it’s important to you, someone local, someone who’s established, someone who’s been in the business for a while and someone who’s got a reputation. I mean, at the end of the day, I mean, it is what it is.

And it just, you know, if you, if you, if you want, if you have a heart surgery, you don’t want to go to some guy that, you know, just came out of college. You want, you want somebody who’s established and someone, I mean, that’s a bad analogy, I know, but I mean, you want someone who’s got experience, someone who knows the community, someone that knows what’s going on in the community, someone that knows the developments. You know, there’s, there’s lots happening in our area that a lot of people don’t even know about, you know, that, you know, future developments, you know, what’s happening, what’s not happening.

And a local agent that is worth their salt is, is updated on that type of stuff. Yeah, absolutely. They’ll be plugged into all of that stuff.

Jeffrey: And, you know, the neighborhood, as you know, is going under, undergoing a lot of different changes. Now the, the, I guess some of the key aspects of that affect, you know, how you’re going to live, you know, the, the different features that you would look at and, and really, again, the availability to, to be kind of plugged into what’s happening. I remember the days of the mid-teens when, I mean, it’s, it’s a bit of an exaggeration, but there was so much demand and so little product and the interest rate environment was fairly stable.

I mean, if you sold something, you know, and you just had a sense of what some of the neighbors were selling for, you could basically put it on the market and it would sell. These days, I don’t think that’s the case at all. I think you do really need to know what’s happening, not just on the financial side, but like you said, in terms of what other properties sold for and the story behind why they sold for that.

It’s not just the number. There could be lots and lots of reasons behind that story.

Patrick: Yeah, a hundred percent.

And I’ve always, I always say to people when I meet with them, listen, anybody, like anybody can sell a house. I mean, like a seller can sell their own house. The question is, is how much money are you going to get? I mean, and that’s where someone who is local, such as myself and someone who’s got experience brings to the table.

I’m going to get you more money. I mean, you can sell your house for $7, but I’m going to get you 10, right? So it’s, it’s, it’s, I mean, people think it’s easy and think that, you know, they’re saving and, but they’re not, they’re losing actually. Yeah.

Jeffrey: And it’s not just the fact that someone can write a description and, you know, know that maybe four bedrooms was going to run more than three bedrooms. It’s all about, like it’s pricing, but it’s also about the network of being able to make sure that, you know, the, the other agents, the, the buying agents who’ve got, uh, buyers who would be really interested in this type of property and being able to bring them to, to the, the showings because, you know, nobody wants to waste time.

And so a lot of, uh, a lot of agents will not even bother going to specific properties if they’re overpriced. It’s like, well, you know, not going to play that game. My time’s worth too much.

Patrick: Yeah, exactly. Nope. You’re, you’re a hundred percent correct.

So again, we’re hoping for a, we’re hoping for a good, it’s only the start of the fall, we’re hoping for a good, a good end to the fall. I mean, I think there’s some positive, like I said earlier, some positive, uh, some positive signs there, there’s some, some weird stuff happening too, but I mean, I think that happens all the time.

And, uh, I think the next, uh, 30, 60 days will be, be interesting. And, um, I, I’m, I’m the glass is half full type of guy. So, uh, I, I think we’re in good shape as long as you’re doing the right things.

Jeffrey: Perfect. All right. And if folks want to get a hold of you, Patrick, what’s the best way to do that? Oh, the best way to reach me is, my office is on Vanderhoof at 103 Vanderhoof Avenue.

Also, email is probably the best, mail@PatrickRocca.com. Um, or you can call me directly on my office line at 416-322-8000.

If I’m not in, I’ll call you back within minutes. Um, so happy to talk to anybody anytime about, uh, any questions I have with regards to real estate. All right.

Jeffrey: Well, Patrick, it’s been a pleasure as always. Uh, thanks for the call. And I know that we’ll talk soon.

Patrick: Absolutely. You take care of yourself. Thank you.