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1 Bloor Rumour Train Gathering Speed

July 22 Update: The 1 Bloor site at Yonge and Bloor is apparently up for sale according to the Toronto Star. If this is true, this would put the future of the tower in serious jeopardy.

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1 Bloor was the most celebrated and most reviled symbol of Toronto’s recent real estate boom.

Realtors lined up for weeks (or paid students and homeless people to do so) for the chance to buy units there only to learn that the developer increased prices by 25-50%  from what they were told they would be paying. It didn’t matter as they bought anyway and hundreds of units were sold in a matter of days at prices in the $1000 per square foot range.

Now, more than 2 years after the initial hype began, no shovel has hit the ground and no one is moving into their piece of Toronto real estate history any time soon. Still the million-dollar question remains:

Will 1 Bloor actually get built?

The latest rumours news on the project is this: it will be built, only it is going to be scaled back to 68 stories instead of the original 80. This is according to the Globe and Mail. So that would mean it is no longer Canada’s tallest residential building, and purchasers who bought units on floors above 68 are…screwed.

But hold on, because The Toronto Star has a remarkably different article in their paper today which says that 1 Bloor is going into receivership and that the current Kazakh financial backers of the project are in mired in a massive scandal. That doesn’t sound like the recipe for building a 68 storey tower to me.

So who is right? I have no idea, but this corner of Toronto deserves a landmark, be it 1 Bloor or something else. My fear is that if plans for 1 Bloor are scrapped, something mediocre will be built in its place. When it comes to condos, Toronto already has plenty of mediocrity but greatness is in short supply.

For a trip down memory lane, check out some of my old blog posts on the 1 Bloor development from when I was a contributor to BlogTO.

• Kazakhstani Developer to Transform Yonge and Bloor: Very Niiice!
• 1 Bloor: What will you miss the most?
• 1 Bloor: Crosshairs of Insanity

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You Should Have Bought 2 Months Ago

The Toronto condo market is hot right now. No seriously, it is.

After months of writing to my readers about how slow the market has been, there has been a fundamental shift in the marketplace over the past 4 weeks. Multiple offers are back with a vengeance. The best properties are selling over asking and in less than 1 week. Buyers are feeling the pinch and I am starting to get used to the phrase ’sorry, that property is sold’ when I go to book appointments for my buyer-clients.

The stats for April should be released by the Toronto Real Estate Board any day now, and they will almost certainly reveal that sales are up and prices are up beyond what anyone was anticipating for this month.

Why? What happened? Has Barrack Obama worked some kind of magical spell over our economy? Are things not nearly as bad as everyone thinks they are? Are we all just living in denial and making things worse on ourselves by buying up all this real estate?

My thoughts on what has caused this recent upswing in the market:

1. Affordability. Prices have come down about 10% overall since the peak about a year ago. Interest rates have been basically cut in half since about 18 months ago. 
2. Spring Fever. Every year at this time the market is at its hottest. This is always the busy season, so in that sense this upswing shouldn’t surprise us.
3. Changing Attitudes. Sellers are more realistic on their asking prices, and buyers are more aggressive as many have been waiting to buy for 6 months or more.
4. Canadian Pride. People are starting to see and believe that maybe it’s true – things here in Canada are not nearly as bad as they are in the rest of the world. Where is the best place for your money to be long-term? Many are thinking once again the answer is real estate.
5. The Investor Equation. For the past couple years, it was very difficult to find a cash-flow positive condo in Toronto with 25% down. Now, due to lowered interest rates and lowered prices, with rents staying pretty flat, it is.

All this is leading many people to wonder if the bottom of the market was back in January or February. Certainly there were some great bargains had during those months compared to what we are seeing today.

What are your thoughts? Contact me or leave a comment.

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Cresford Does The Right Thing With MYC

Feb 2010 update: MYC is back! Relaunch coming soon. Contact me for new pricing and new floor plans. Starting from the high $200s.

Cresford is making a very bold move with MYC. They are lowering their prices on all suites-significantly. As in up to $90,000 per unit.

MYC launched with much fanfare, but with terrible timing. They started sales literally the very week that the stock market began to plummet and it was bad economic news followed by worse economic news every day that week back in October ‘08.

I was there at the broker’s luncheon event where they announced the broker’s sales event which was to happen a couple weeks later. The luncheon was absolutely packed. Something like 250 brokers and agents were there and it certainly seemed like the project was going to be a massive success and would likely sell out very quickly.

The broker’s sales event took place as scheduled a couple weeks later, and to everyone’s surprise, only a handful of units were sold that night and there were more valet parking attendants than buyers (seriously)!

Prices started at about $500 per square foot and as you reached the higher floors on the south side you were easily paying $600+ per square foot. Resale units on Merton were going in the $400-$500 PSF range and many buyers were baffled at the prices they were seeing at MYC. Most buyers I talked to loved the project and the location especially, but they just could not swallow the prices.

Fast forward to today and the project is only about 35% sold, not even close to the number they need to get the project done relatively on schedule. So Cresford announces they are lowering prices of all suites to the tune of $60-$100 per square foot.

And in a somewhat unprecedented move for a Toronto developer, Cresford has said that they will credit all previous purchasers an amount equivalent to the reduction in price! A savvy PR move that will surely win them some favour with their clients, the broker community, and the public.

So why is Cresford doing this? My thoughts:

• Their construction costs are significantly lower than first budgeted. I was told something like 12% lower.
• They believe strongly in the project and want to get it built. The location is amazing and the architecture is beautiful.
• They understand that they can always raise prices again in the future once they hit their threshold to start construction.

More details to come. Once I have a revised price list, I will try to post it here. For more info, contact me.

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Signs of Life? February Condo Market Stats Have a Pulse

It’s that time of the month again, TREB just released their stats for February. The numbers aren’t as painful to look at as in the previous few months, but does this mean we are on the way to recovery?

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New Condo Sales Still Down; Prices Still Up

[**CHART REMOVED DUE TO COPYRIGHT CLAIM BY REALNET CANADA INC.**]

Realnet has released the sales figures for new condos for the month of January. Prices are still increasing despite the fact that the number of sales continues to be significantly lower than a year ago.

Prices are up 8% for high rise condos while sales were down 64% compared to January 2008. 

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2009 Begins As a Buyer’s Market

TREB has their January stats up for resale properties. Looking at the numbers for downtown condos it is now very clear: we are in a serious buyer’s market. 

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Can’t Sell Your Condo? In this Market, Consider Renting

If you have have tried to sell your condo anytime in the last few months, you know what the Toronto real estate market is like better than anyone. 

Condos in ‘hot’ buildings that a year ago would sell over asking in week are now languishing on the market for weeks. Price reductions are happening every day. Conditional offers are welcomed with open arms as opposed to being laughed at in the heady days of 2007 and early 2008.

The bottom line is that it is a tough market to be a seller. The pressure is on you to have an immaculate unit in a great location at an irresistible price. And even then, that is no guarantee of success. 

One option that you might want to consider if you find that you can’t sell your condo, is to rent it. The rental market is not that bad right now. Leases are being signed every day as some would-be buyers are deciding to rent for another year. After you rent out your condo, you’ve got to live somewhere, so what do you do?

If you are fortunate enough to be in a financial position to carry two mortgages, then you buy somewhere else and take advantage of the market. But if you are like most sellers, that is not an option, so might I suggest renting yourself. That’s right, a real estate agent is telling you to rent and not buy (queue the dropping of jaws).

This is just what one of my clients did recently. Their condo unfortunately did not sell in a timely manner and due to personal constraints, they had to move, they could not wait for the market. So they rented out their 1 bedroom condo for about $1600 per month and then found a suitable place themselves in another part of the city for about $1200 per month. So they are actually ‘clearing’ about $400 a month while still paying down their mortgage. Their plan is to wait a year, see if the market has improved, and then either sell, or continue to rent. Not bad option if you can make it work.

I always love to hear your feedback. Leave me a comment or contact me any time.

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Price of New Condos Holding Strong Despite Plummeting Sales

[**CHART REMOVED DUE TO COPYRIGHT CLAIM BY REALNET CANADA INC.**]

The final sales figures for new condos from Realnet are in for the December and the year 2008. In short, prices are still going up, while sales have dropped off significantly. [Note: these numbers are for new condos. For resale condos, see my previous posts for more stats on the downtown condo market.] (more…)

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Sales Down. Prices Down. Inventory Up & Down?

Finally the numbers are in. TREB took a lot longer than usual to release the final sales numbers for the month of December, maybe because they were so painful to look at they had to double check them several times, hoping they would magically improve themselves. Here are all the gory details.

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New Condo Sales for November 2008

Today I want to share with my readers a press release from BILD – Building Industry & Land Development Association. 

They just released their sales statistics for new homes and condos sold in November. For Toronto, 789 high rise condos were sold. At first glance this number sounds pretty high, but when you hear that in November of 2007 1922 new condos were sold in Toronto, this means that sales this November were down 59% versus last November. This is very consistent with the numbers for November’s resale market, where downtown west condo sales were down 61% and downtown east 51%.

We have surpassed the 15,000 mark for condos sold in the GTA for 2008 so far. We will likely end up with about 15,500 condos sold in 2008, which is far off of 2007’s record pace of 22,000, but pretty much dead-on with previous predictions from new development tracking company, Urbanation, who was calling for around 16,000.

Click here for the full press release, or continue reading.

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