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Temperature Check: Bathurst and Lake Shore Edition

This is the second installment in this new series whereby I am attempting to give my readers a street-level, in the trenches sort of perspective of what the condo market is actually like. “Temperature Check” will help show what it’s like to be a seller in the current market and what you can expect if you sell your property now. I’m sharing with my readers some stats that no one else in the market is sharing.

Last week I listed a unit at one of the well-known buildings located at Bathurst and Lake Shore. It was a 1+den with parking and locker on a medium-height floor facing north/north-west. Here is the activity the listing received:

• On the market for 2 days
• Approximately 20 Realtor showings booked
• 2 email inquiries from buyers who saw the listing on the internet
• 1 bully offer received, which started a bidding war with 4 offers total
• End result: Sold for 5% above the asking price

Interpretation:

The results of this were better than I was expecting, buildings in this area typically are not known for their ability to attract bidding wars, and the sheer volume of activity on the listing in just 48 hours was indicative of a very hot market. We were planning on holding off on offers until about a week after the property was on the market, but we received a bully offer after just 2 days on the market so I had to jump into action, calling and emailing every agent who had booked a showing on the property to let them know the situation. 3 other agents responded and also brought offers to the table, which was surprising to some degree but great news for my seller. It needs to be noted that we did not price the property low to attract a bidding war.

My key takeaway from this is that finding a 1 bedroom and den with parking and locker for around $300K downtown these days is very rare, and buyers that have been priced out of ‘downtown proper’ are now looking to areas like Bathurst and Lakeshore, Liberty Village etc. as the next best thing. Of course it goes without saying that a prerequisite for success like this is understanding how to prepare your condo for sale, and to position it properly in all your marketing efforts to generate maximum activity and results.

If you are thinking about selling in 2011, I don’t see things getting any better for sellers than they are right now. Questions or comments? Please contact me.

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Defence

We are bordering on a buyer’s market right now. I wouldn’t say we are quite there yet, but with the Sales:Active Listings ratio hovering around 35% for downtown condos, buyers certainly have choices when they go out looking for condos this summer. But I don’t want to talk about buying for a change, I want to talk about selling. Specifically, as a seller in this market, you better be able to defend your asking price.

In a seller’s market, where a monkey could sell a condo, agents and sellers will quite often pull a price out of the air without giving it any thought. In a buyer’s market, it’s back to the fundamentals of marketing: Product, Place, Promotion, and PRICE! Yes, choosing the correct asking price is a very important piece of the marketing mix for selling your property.

If you over-price your property, you are shooting yourself in the foot. You will get less potential buyers through your property, less offers, and potentially no offers at all. Inevitably you will have to reduce your price but by then your listing will be ‘stale’ and most potential buyers will have moved on.

You might think there are no risks associated with under-pricing, but there are. Underpricing a listing in a seller’s market results in multiple offers and potentially an artificially inflated selling price. Underpricing in a buyer’s market when there are less active buyers and more listings means you could end up selling your property for less than it is actually worth, but you would never even know it because there just isn’t the same critical mass of buyers out there.

Bottom line, you (and more importantly your agent) need to be able to defend your asking price when a buyer’s agent comes a calling and says, “How flexible is the seller on the price? It is a buyer’s market after all…”. Questions or comments? Thinking of selling? Contact me.

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Death of the Sales Centre?

Building a sales centre on the site of a future new condo development used to be the first thing that developers would do when launching a new project. Developers of Toronto condos typically would spend hundreds of thousands, sometimes millions in the construction of these temporary structures that were built to be torn down. Inherently wasteful but absolutely necessary to create an experience for the consumer to get a ‘feel’ for a theoretical building that only existed on paper and in plastic miniature.

With the condo market heating up like it’s 2007 once again, many developers are skipping the sales office all together. Some new developments downtown are basically selling out without even advertising at all – strictly through word of mouth, database marketing,  and selling to the agent (Realtor) community.

Another trend is selling before the sales centre has been completed. Without naming any names, there are several developers who in my opinion are wasting their money constructing these elaborate sales offices and model suites only to have the entire building virtually sold out by the time the sales office is completed. This is especially true for projects that are already geared towards investors and/or that have a high % of 1 bedroom units.

Clearly the new condo market is red hot, so why are so many developers still shelling out all this money to construct these sales centres?  What about taking that money and using it on alternative marketing channels or here’s a thought: build a better quality product at a great price to differentiate yourself from the competition.  Perhaps the answer is simply that we are talking about a very staid industry that is very slow to change how they do business.

Thoughts or comments? Contact me.

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Coming Soon: DNA3

Canderel Stoneridge, the developer behind College Park Residences 1&2, AURA, and DNA 1&2. DNA3 will be located at 1030 King Street West,on the north side of the street where the former Chrysler dealership buildings still stand. (Google Streetview link).

Units at DNA 1 and 2 are currently selling in the $500+ per square foot range. A fully upgraded terraced unit with parking just sold for over $600 PSF. No official word yet, but I am expecting prices for DNA3 to be starting around $500 PSF.

Canderel Stoneridge has been increasingly taking to the social media airwaves to promote and market their projects and already have a very active Facebook page as well as a Twitter account for DNA3. They recently sponsored a major event in conjunction with Fashion Week. They have definitely started the marketing push early as they are not launching this project until around March 2010.

For more information on DNA3 including details on any upcoming VIP sales event opportunities, please contact me and bookmark this page for updates.

Just for fun, check out this info sheet from waaay back in 2002 when the first phase of DNA was launched. Check out the prices and see how the condo market has boomed over the last 8 years!

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REVE Sells 270 Units in a Weekend

Have you heard of REVE? For most of my readers the answer is probably ‘no’. You’d probably be surprised to know that REVE is a new project by Tridel (Canada’s largest condo builder), that it is located downtown, and that over the weekend they completely sold out of all 1 and 2 bedroom units and have a massive waiting list for any rescissions.

Tridel was very smart. They saw a massive shortage in the marketplace for units priced under $300K. They packed the building with small 1 bedrooms and studios and the market responded loud and clear. They launched this project with almost no marketing, using only the momentum of the market, word of mouth, and a simple formula of giving the people what they want.

REVE will be located at 560 Front St West, just west of 550 Front St (a mid-rise condo building), and just east of Front and Bathurst. Not the most glamorous location, but still a short walk to the King West epicentre – King and Bathurst. Prices were in the $500 per square foot range which for a Tridel project downtown, is a pretty good deal.

The project is already under construction and is to be completed by next year. The site was originally going to be a hotel, but Tridel bought the site over the summer and will build a condo on the existing floor plate. This may explain why many of the floor plans were quite unusual – the floor plate was never designed to be for condos.

To view floor plans for REVE, click here. 3 Bedroom units are still available. Contact me for more info.

Those of you who have put me on your Radar should know about REVE, because I sent out a Radar Pulse about it last week. The market moves so fast that I couldn’t possibly write a separate article for every single project launch, special event, or investment opportunity on this blog. Put me on your Radar today and stay informed! (We are almost at 25 users of Radar. Once we hit 25 I will do a random draw for a $50 Best Buy gift card!)

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Prepare to be Disappointed

I would love to paint a picture for my readers and clients that buying a new, pre-construction condo at a VIP sales event is a simple and straight-forward process where if you have money and are ready to spend it, you get exactly what you want when you want it. Unfortunately this is not always the case.

This past weekend I attended yet another one of these VIP broker-type sales events at one of the highest-profile condo projects downtown in the King and Spadina neighbourhood. Condos at this project are selling in the $800-1000 per square foot range. These are not low end condos.

My client wanted to buy a 1 bedroom unit for something around $500K. We lined up early, we knew exactly what we wanted, we even had our deposit cheque ready to be handed over. When the doors finally opened, we were told that there were no 1 bedrooms available (even though it was advertised that there would be). In fact, there were no units available unless we wanted to spend at least $750K.

Of course, I knew this would likely be the case beforehand and had prepared my client for this reality. But most people attending these “VIP sales events” have no clue what they are walking into.

My best advice to buyers is “prepare to be disappointed”. Even though you may know exactly what you want to buy and have the financial means to do so, you may go home empty handed. It’s the nature of these sales events. They are built around hype and anticipation. Once you are through the doors they know that given the chance, most people will buy just about anything

Questions or comments? Feel free to contact me or leave a comment below.

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Fly Condos Celebrity Contest

Fly Condos – a new condo development by Empire Communities located at Spadina and Front St is trying something new. In an effort to promote the project, the developer is holding a Celebrity Look Alike Contest with the winner getting $75,000 off of the purchase of a suite at Fly Condos. Very interesting tactic and obviously aimed at building some buzz and creating some hype for the project, especially amongst the under-30 crowd who they are very clearly marketing their project to.

The downtown Toronto Condo market is red hot and developers are constantly trying to attract investors and first time buyers alike to choose their project over the many others available in the city. There are so many new condo projects launching every month all over the city of Toronto that developers are now getting very creative in their marketing and promotion schemes in advance of launching their sites. Fly Condos Celebrity Look Alike Contest is just one more example of this creative, non-traditional real estate marketing.

So if you reckon you look a little like Brad Pitt or Angelina Jolie, why not enter the contest and find out? Presumbaly the winner of the contest will be the person most closely resembling their chosen celebrity as voted by visitors to the Fly Condos Contest website.

If you are thinking about purchasing a unit at Fly Condos but you don’t want to wait until the sales office opens to the public, or you just aren’t interested in waiting to see if you really do look like Brad Pitt, please contact me for VIP sales before the public.

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