Do you believe there is a correlation between the weather and Toronto real estate sales?
After temperatures warmed up and the sun shone in all its glory this past weekend, Buyers went en masse touring the abundant Saturday & Sunday Open Houses in the hopes something
perfect suitable acceptable habitable would match their budget. One pair of our Buyers were positively giddy to find one magical well-priced contender, despite noticing there were an abundance of stylish latte-drinking mobs of Buyers lingering far too long in the open house subconsciously staking out their finder's claim. Yes, underneath the veneer of social niceties and fake fur parkas, everywhere one could feel yet another bidding war brewing.
Welcome to our latest Tale From The Real Estate Trenches!
First, we have a soft spot for Terry O'Reilly's CBC Radio show Under The Influence. Just a few weeks back we enjoyed listening to "How Weather Affects Marketing". Here's a synopsis from the CBC website:
"With 75 years of climate data cross-referenced with reams of shopping research, marketers can now use the weather to predict sales. Sears Automotive knows that 5-year old car batteries die after three consecutive days of sub-zero temperatures, so they advertise on day four. The busiest day of the week at Harley-Davidson dealerships is exactly 22°C and sunny. When spring temperatures hit 21°C, hair removal products surge 1400%, and BBQ sales jump 200%. And did you know that when the temperature drops just one degree in the Fall - just one degree - mousetrap sales surge 25%? Marketers do."
Here's the link to listen to this extraordinary piece called How Weather Affects Marketing.
There are a lot of factors which influence whether a house will spike in value in a bidding war. If you're seeking a crash course in this phenomenon, here's three of our highly informative articles:
When the winter begins its thaw - and the sun shines under crystal blue skies - Buyers do get psyched to purchase real estate. Yup!, we're all collectively in the mindset that Spring Blooms Fresh Beginnings!
As for the property which caught our Buyers' eyes, there was no question the 2007 renovated 2-bedroom detached dwell with finished basement and two car garage located steps from Bloor Street and the Jane subway station was bound to go into competition. Having sold freshly-renovated in February 2007 for $545,000, again in May 2008 for $559,900, and a third time in November 2011 for $673,000, it was well-positioned with its $749,000 price tag. After all, if one gave it a 9% increase in values - which is a 'reasonable' escalation for its demand location - this should have landed under the mid 800s. That it spiked 18% over list with ten offers - and 26% more than it sold for 30 months ago - signals values are surging into new thresholds of precedent setting prices. Yes, the Spring market is here, and Buyers are unrelenting in their search for hard-to-find turn-key fully-renovated properties available for under $1million (which is the threshold for CMHC high-ratio - meaning less than 20% down - financing).
While the spring Market has arrived full throttle, this frenetic behaviour is not unusual. Here's an amusing
rant post from last year called House-Hunting In Spring which shares more insight into the dynamic we've experienced for several years now.
However, before you sign off despondent, lamenting how you never thought the hunt for a house would lead you all the way to (a bidding) war, urbaneer.com wants to offer you some insight and reassurance.
Did you know there are seasons to real estate? While Canada's climate has four distinct seasons, the Toronto real estate market has just three. And it's the spring market where the momentum of demand cycles to its highest while the supply of good housing stock is at its lowest. In other words, we're about to experience a whole lot of 'cray cray'! For a quick lesson on the seasonal dynamics of the Toronto real estate market, here is our Seasons To Real Estate newsletter.
Are these sales a case of 'the early bird gets the worm?'.
We prefer the proverb 'Everything comes to those who wait!'
Welcome to the spring market! Better buckle up!
~ Steven and the urbaneer team
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