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Toronto home sales rising, bidding wars declining amid coronavirus pandemic

Toronto home prices rising, bidding wars declining
WATCH ABOVE: Toronto’s real estate market has made a major comeback after a brief lull due to the COVID-19 pandemic, but homebuyers can take comfort in knowing bidding wars are not as common as those once were. Caryn Lieberman reports.

Much like the weather, the real estate market in Toronto is hot. It seems not even a global pandemic can hold back home prices.

“Pandemic or not, I don’t think anything can burst the bubble in Toronto right now,” said Kate Craig, sales representative with Union Realty Brokerage.

Read more: June home sales in Toronto just shy of year ago, prices up nearly 12%

She pointed at a semi-detached home on Bowmore Street, near the Beach, she just sold.

“Tonight was supposed to be its offer night and within three days we had a great buyer come along that also believes it’s such a great pocket and they scooped it up before tonight,” she explained.

However, just three blocks away, a similar semi-detached home went into a multiple offer scenario.

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“They made it to their offer night last night and they had five offers on it and they did really well, as well,” added Craig.

Homebuyers need not despair as there is some good news when it comes to purchasing a home in the current market.

Read more: Despite coronavirus, GTA real estate prices are rising slightly

Global News gained access to Toronto real estate sales data after the Supreme Court declined to hear an appeal by the Toronto Real Estate Board against a decision by the federal Competition Bureau in 2018.

TREB, now the Toronto Regional Real Estate Board, was fighting to keep access to the data closed.

The data shows that while home prices are higher than they have ever been, bidding wars are not happening at the same level as in 2017.

One way to look at bidding wars is to compare the average list price of homes with the average sold price.

For June 2020, the average list price was effectively equal to the average sold price, suggesting that most homes are not being bid above asking. For comparison in March 2017, the average home price was 11 per cent above the average list price.

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The data also shows, when it comes to the proportion of homes sold for at least 10% above their asking price, in March 2017, over half of all homes (53 per cent) sold for at least 10 per cent above asking.

Read more: Toronto home sales in May up from April, but down more than half from a year ago

In June, it was only eight per cent.

In March 2017, 39 per cent of homes sold for at least 15 per cent above asking. In June 2020, it was only four per cent.

“It was a constant … watching the situation and thinking what are we going to do,” recalled Lisa Worth about selling her home recently in Toronto’s Beaches neighbourhood.

Deciding to make a lifestyle change, Worth and her family planned to sell their house — then COVID-19 hit.

The family’s goal nonetheless was to get the best value for the home, regardless of how the offers came in and how many there would be.

“We knew what we wanted and we got it and it was quick and we’re very happy with the outcome of what we sold for,” she said.

Her real estate agent , Shea Warrington, with Royal LePage Estate Realty, has been busy, despite the pandemic.

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Toronto real estate market rebounds in June despite pandemic
Toronto real estate market rebounds in June despite pandemic

After a brief lull in April, Toronto’s real estate market is looking as robust as ever.

“I’ve sold 12 properties since March and four of them have been in bidding wars and eight of them have gone over ask,” said Warrington.

She pointed out, however, that the pandemic has impacted her clients’ decision making when it comes to choosing the right home.

“I think people are faced with working at home and I think they’re also faced with kids not going to university, so what I’m seeing is that people need more space and people also are really trying to embrace their own resort. I don’t think travel is coming soon,” she said.

“Nobody is buying Raptors tickets or Leafs tickets … We’re trying to entertain ourselves and entertain our kids.”

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If people continue to spend more time at home, and home prices keep rising, a return to 2017 style bidding wars could be on the horizon.