How crazy has the Toronto Real Estate Market become?

Here’s an article from the Toronto Star on Sunday June 10, 2007. It’s mind-boggling:

HOUSES - News - Unreal estate: Houses
Unreal estate: Houses

There are semi-detacheds that you can’t swing a cat in and they’re going for 450 Trish Brennan , agent

In T.O.'s sizzling market, even a zany price war for a comely house can pay off. So far, anyway

Jun 10, 2007 04:30 AM
Jennifer Wells

“The washroom didn’t work,” says Gala Chan, reflecting. “The toilet didn’t flush. Maybe that’s why the bucket was there.”
Ah, yes, the bucket. Not to mention the copper pipe that popped up through the basement ceiling, into the foyer, and crawled through the banister and up the stairs to the second floor, across the riser and then into the bathroom through a hole in the door and from there to the bathtub.
Whaddya expect for half a million? This is the Toronto housing market.
Or was. When Gala Chan and her husband, Lee Chiang, emerged as the successful bidders for a house in High Park almost two years ago to the day, they found themselves with a handsome three-storey home that needed …
Well, for $511,000 – $76,000 over asking – the wreck of a house needed just about everything. Pipes had burst. Radiators too. Ceilings sagged. The house was a tragically neglected and unloved sight.
Positives: The mantelpiece in the living room was a keeper. And there was an attractive door with etched glass in the hallway.
Not on your life. Prices were popping in the immediate neighbourhood, as high as $900,000 for homes west of Roncesvalles that had been gussied up like girls primping for prom night.
Plus, in the magical ways of a housing market gone mad, the young couple concurrently sold their much smaller, though beautifully done, semi-detached home on the east side of Roncy for $512,000 – $82,000 over asking.
Possession of the new abode was set for July 31, 2005. What was the worst of it? “The smell,” says Lee. “We were afraid it was going to stay with us after we had done everything.” The walls were infused with the stink of tobacco and the floors with other odours, and that’s all we’ll say about that.
Other stuff: There was the weird mound of buried pickle jars and test tubes in the backyard, but really, as far as the house itself went, all that was required was to strip the new acquisition down to the studs and make her whole again.
Which they did.
Curved plaster mouldings were lovingly restored; deep baseboards matched; oak stairs refinished.
The parlour-sized living room was retained, as the couple was not keen on an open concept for the front of the house.
The kitchen. There had never been much of a kitchen, typical of homes of the era.
In went cork floors (environmentally friendly) and concrete counters (indestructible).
And wide-open spaces and top-of-the line appliances which Gala, ever the bargain hunter, got for a song, and cherry wood cabinetry handcrafted – get this – to allow for the uninterrupted flow of the wood grain from drawer to drawer to drawer. That’s right. It matches.
“I sat on the floor and just stared at the cupboards until midnight,” says Gala of the day the new cabinets went in. “I just sat and stared at them … Instead of just cutting indiscriminately, he must have sat with all the boards and looked at them to make sure the finished product was continuous.”
This sounds like another form of madness. But the craftsman in question had renovated Gala and Lee’s prior kitchen, and the couple knew that the end product would be beautiful. Which it is.
If you’re hearing the sound of money, you are not mistaken.
Gala and Lee have commenced a two-storey extension, pushing out from the back of the house. Once you factor in the additions, the fix-up costs will run close to $300,000.
To anyone unfamiliar with the price of homes in the immediate vicinity, this may seem like a substantial sum.
Well, hop aboard this escalator here and take a look at the house on the adjacent corner at Sunnyside Ave., which sold two weeks ago for $1.2 million or, to get sticky about it, $1,207,300.
What, one wonders, is that $300 all about?
“I broke the million-dollar barrier in February '05,” says real estate agent Trish Brennan, referring to one of the grand homes on the very grand High Park Blvd. “Everybody said, `Oh my God, what are you doing in High Park? You’re screwing up the pricing.’”
But $1.2 million on the much more modest Sunnyside Ave.? Are we, collectively, nuts?
“For a million seven you can go to the Annex and get yourself a semi-detached house without parking that needs work,” says Brennan, an agent with Royal LePage who, as it happens, was the sales agent on Gala and Lee’s new home.
Brennan’s specialty is High Park. She lives there. “Go up to Annette,” she says, mentally pointing north of Bloor St. “There are semi-detacheds that you can’t swing a cat in and they’re going for 450.”
Back when she listed the house that Gala and Lee would then buy, Brennan knew it was a pile of good bones on a wonderful lot on a very nice street. Oh sure, it was, as she says, “full with crap.” A dozen broken shopping carts. Piles and piles of newspapers. “If there was a broken tricycle he’d bring it in,” she remembers of the elderly fellow who lived there for decades.
Brennan has handled “hoarder” houses before, and this was by no means the worst. There was the gent in the forced-air home who couldn’t make it up to the second-floor bathroom any longer and found the air vents handy. And that’s all we’ll say about that.
To Gala and Lee, the problems in the once stately home they had purchased were mainly cosmetic.
Out went the decrepit bathroom and in its place emerged a sleek laundry room. Immediately adjacent, a new bathroom was designed by the owners, with tumbled marble tile floors, nicely heated, and a zebra wood vanity.
At various times,three work crews simultaneously beavered away on the home. And no, there are no horror stories to share. Gala and Lee chose their trades people carefully and they are thrilled with the result.
Still, it’s an enormous amount of dough. The question arises: investment or money pit?
“I think it’s safely worth $900,000,” says Gala, which means the pair are more than $100,000 up on their investment, were they to sell. Neither Lee nor Gala has any interest in selling. They’re in, they say, for the long term.
Then again, there are tremors in the stock market. Interest rates are rising. What does that portend?
Two blocks north, a home that had been renovated from tip to toe was placed on the market in March at $979,000. The chatter on the street: mismarketed and mispriced. The asking price was dropped, twice, before the place ultimately sold in mid-May for $865,000.
As it happens, the buyers lived four doors down from Gala and Lee’s former house, at 32 Lynd Ave. Two weeks ago, Dale Fallon and Nancy Carr put 24 Lynd on the market, a pretty, though small, semi-detached. Asking: $514,900 with a hold back, meaning that offers would be held back until a particular date, a common convention in the housing market now, and one that’s meant to generate the maximum level of interest on the buyer’s side.
On Wednesday, the listing agent, Neil Spiegel of Sutton Group, pondered what the house might go for. He reflected upon that $1.2 million sale. He observes what he calls an “architectural significance premium,” which commands what were once Rosedale prices for select High Park homes. Consider a corner house on Indian Rd., one block to the west of Gala and Lee. Asking: $1.09 mil. For those into the vice known as real estate porn, an eight-minute online video sweeps lovingly through the interior and exterior of the everything-you’d-ever-want-in-a-house house to the strains of Bach.
It is into this neighbourhood that Spiegel’s clients are stepping up.
So what might they get for their little house on Lynd? “If the world fell apart tomorrow, 550, 560,” says Spiegel. “Touching 6 is a definite possibility.”
Gala and Lee loved their house on Lynd. The neighbours, the canopy of trees.
Standing on the porch of their newly done home, Gala stares at the rocks that have just been placed to frame the front garden, which has not yet been landscaped. She thinks one of the rocks is upside down, if a rock can be upside down.
Is there anything the couple is not happy with?
“The orange,” Gala says of the house’s exterior trim colour. “He hates the orange.” She means Lee.
From the front stoop one can see the $1.2 million house. This makes everyone here happy.
On Thursday evening, Neil Spiegel and his clients studied the purchase offers for 24 Lynd. There were 13. It was, says Spiegel, a really good night.
“I had bought the house nine years ago as a single guy,” says Fallon. “I had put the work into it. I was happy that buyers could see the value in it.”
By 9:30 the deal was done.
Sale price: $640,000.
$125,100 over asking.

I used to think Toronto was nuts, that’s untill I came out West.

I could tell you some stories about real estate in Vancouver… This place is crazy…

The agents around here are now doing this hold back ****, they get half a dozen offers and if you but a home inspection into the offer you mite as well not make the offer as it will be turned down. The agent are trying to drive prices up and sell quick with no conditions and its working.

If buyers are so desperate to buy with no conditions, serve them right when something goes wrong with their dream home as they cannot claim they undertook their due diligence.

You right Ray but it does not do our buisness any good if the buyers stop calling and I believe thats what some of these agents are up to. No inspection and they can sell any piece of crap they want for what ever price they can get.