Bosley Realestate

Dear Urbaneer - Why Are So Many Downtown Houses Being Renovated?

September 17th, 2013 | Dear Urbaneer

Have you noticed how it seems today that whenever a house sells, the moment it closes a big dumpster is parked out front and the house is pretty much gutted from top to bottom? A full year later the house is ready for possession and, as the moving van drives off after delivering a showcase of designer furnishings, the new owners finally move in. Or much to your surprise, a For Sale sign goes up setting yet another new precedent for market value on the street. It never used to be this way and yet now it appears to be a common occurrence. Which brings us to this month's Dear Urbaneer post, which features a question posed by one of our clients.

Dear Urbaneer

We are readying ourselves to climb on the next rung of the property ladder. We've established ourselves professionally and as a couple, and think it is time for our real estate to follow suit.  That said, we plan to sell our starter condominium downtown in a bid to move up into a single family residence. On our must-have list is a downtown location, which is convenient to work- but also in reputable neighbourhood with a family-friendly vibe.

However, when we translate our must-have list into actual properties, it seems that all the listings are either houses that need to be gutted, or they're newly renovated with astronomical asking prices.  Is this actually what is happening? Why?

Signed,

Ready to buy.

Here's our reply:

Dear Ready To Buy

Regardless of which neighbourhood you live in the City of Toronto, our central housing stock is generally well over a hundred years old. These dwellings can be described in a number of ways: solid brick or frame construction; cottage or mansion. Regardless of the form and shape they take, these properties have participated in property evolution since their inception and initial construction. Some were modified to reflect the cultural personality of the residents, others converted from massive single family dwellings into income properties, and even back again. Others have been modernized, topped up or expanded to suit the needs of changing households. Whatever the reasons, our city streetscapes bear the stamp of 100 years of styles and fashions in architecture, some of it pretty, some of it not.

When a property surpasses its 100 year old anniversary, it is generally deteriorated and at times, dilapidated. Sometimes these properties are so far gone, that there is not an economic case to salvage them. Unfortunately,Toronto buildings are finally meeting the end of their life span, in particular in former working class neighbourhoods where properties weren’t constructed with the same level of craftsmanship and expense as homes for the merchant class and wealthy elite. And in the original City of Toronto, which by and large has been an immigrant reception centre filled with optimism, hope, and a lower price tag, these properties have now reached the twilight years of their life span. They have a lean or a slope, a cracked foundation or dry rot. The dwelling may have suffered water or termite damage, or it’s just too small or chopped up for our lifestyle needs. However, the location remains super sought after, which means that there are compelling reasons to replace it with a structure having a higher and better use. Sometimes it’s a bigger house, or in other instances properties are assembled into development sites for stacked townhouses or even high rises. As the demand for downtown living grows faster than the supply and buyers remain less interested in renovating than in financing a turn key purchase; the city market has now burst into a new build frenzied frontier in a bid to replace old decaying housing.

Twenty-five years ago, research showed inner city neighbourhoods were morphing from immigrant and working class occupants towards an educated, youthful professional middle class. As first generation Canadian kids bought their first homes, they weighed out a property’s value based on the existing social fabric of the area, the affordability of the house against its overall condition and its accessibility to the downtown core. Back then the City was a tapestry of ethnic neighbourhoods clearly defined by a century of immigration, plus distinct areas of town that were considered ‘bad’ or ‘good’ based on housing mix and crime reports. Today, all that has been diluted in the face of property evolution , as these immigrant neighbourhoods change. This can be attributed to an aging long-time resident population, and because many of these owners are selling their city homes for a tidy profit as they move out to the suburbs.

In their place, city neighbourhoods have blended into a fusion of Canadian faces, a new generation of mostly younger downtown working professionals now scrambling to find affordable housing anywhere in the central core. A "desirable" location no longer fits in a geographical box, for as old houses get gutted or rebuilt on virtually any city street they will be offered completed at a price point closer to $1.2 million or more than not. This isn’t necessarily greed or gouging,  but in support of the hard costs of construction, materials and labour, and the soft costs of permits, fees and financing really add up. However, it does not detract from the oddity of seeing a showdown between the home that you loved and repaired patchwork style over the years and a wrecking ball.

That said, while there are still a substantial number of century homes that have withstood the test of time through earlier renovations, diligent maintenance and careful repair, the arrival of the rebuilt, gutted and newly constructed calibre city residence is changing the way we view real estate, location and its housing differentiation. It is fast approaching that no matter where you are in proximity to the downtown core, it can no longer be regarded as a good or bad area. As the city expands and commuting times balloon and swallow up more of our lives, any house near a subway or streetcar line will be coveted by the urban professional who is hip to the fact that most streets are seeing a major rejuvenation. We now live in a time where properties on any street can range from land value to executive pedigree, and each will find its buyer. The future forecast is that this will only intensify. Whether you’re looking in Leslieville or Roncesvalles, Brockton Village or The Junction, we have only just begun to see a new Urban Revival where everything downtown is considered Premium and a certain profitable investment.

Have questions? At urbaneer.com, we focus on the many aspects of buying and selling real estate. With a comprehensive understanding of Toronto’s 42 village neighbourhoods, and an acute awareness of how our built environment influences personal satisfaction, we pride ourselves on being one of the city’s more personable real estate boutique services. Offering a pressure and hassle-free approach to real estate sales and marketing, log on to urbaneer.com to learn more about us! Not on-line? Just pick up the phone and call us for an introductory package. Thinking of Selling? Our business is as much about promoting properties for sale as placing buyers in their dream home. Your property, as part of our direct marketing newsletter initiative could instantly arrive in the mailbox of over 25,000 area households! Ranking in the Top Fifteen of Bosley Real Estate’s over 220+ sales associates, we are your friendly effective real estate team!

~ Steven and the urbaneer team

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