Scott Reiart

My name is Scott Reiart and I am a realtor with the Real Estate Brothers at Keller Williams Advantage in Leslieville. I grew up in the Beaches in a home that has been in my family for over 90 years, and I recently moved to Birchcliff just a stone’s throw from the Lake when we found a project and piece of land that we couldn’t resist. As for the next move… well, better to ask the wife! My passions are my family (my wife Emily and I have 2 kids and counting), sports (beer league hockey and softball and fantasy NFL football), cooking (my meat smoker is my third child), my work (I have had real estate investments since my early 20’s) and writing. Read More ..
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Holy Bungalow!!

Holy Bungalow!!

The meteoric increase in real estate prices across the GTA has certainly been well documented, in some cases ad nauseam with certain media outlets. Being in the business, it seems every week I have some variation on the same conversation, usually “Holy crap, did you see what 123 Main St. sold for last night? Those people must be nuts!!” Every night new sale records are set, with no end in sight. The poor buyers have the deck stacked against them like never before.

In this environment, I would argue that no house is more coveted than the humble East York bungalow. These bungalows are hot, white hot. Think Margot Robbie hot in the Wolf Of Wall Street, and you get the idea.

 Take Lankin Ave in East York as our test street. Our team listed a standard issue bungalow for $639k in April of this year, and we expected it to sell for anywhere from $750k to $775k. Offer night came and with a flood of offers, 12 in total. When the dust settled the winning bid came in at $861k, or approximately $100k more than we expected. We were shocked and our lovely seller was even more shocked. A new high bar was set for the street, for about 6 minutes. August 30th saw a new record set, and this time the number was $999,000!!! That’s an increase of $138,000 in about 4 months, and we now officially live in looney land.
Lets look at some sales of bungalows on the street since 2014.
Bungalow A – sold for $676k in December of 2014.
Bungalow B – sold for $747k in June of 2015.
Bungalow C – sold for $861k in April of 2016.
Bungalow D – sold for $999k in August of 2016.
 So who is buying Bungalow D at this kind of price? It’s certainly not the flippers anymore. Interestingly Bungalow A was flipped by being “topped up” with a second storey, and re-sold for $1,246,000 in July of 2016. This sale also happens to represent the high sale on Lankin Ave for this year. But that was 2014 (for the purchase) and this is now, and these flips just don’t happen anymore. There simply isn’t any margin for profit, no “spread” to make money.
Lets look at Bungalow D again in the context of a potential flip.
1) Purchase price of $999k
2) Renovation / permits / soft costs (realtor fees, land transfer) of $400k
Total investment of $1,400,000. Most flippers insist on a profit of $250k in this scenario, meaning it needs to sell for $1,650,000. The market is blazing, for sure, but not $1,650,000 blazing. Keep in mind the high sale for 2016 is $1,246,000 as mentioned above. A flipper making money is a bigger longshot than the pimple faced geek scoring with the prom queen.
Clearly, then, the bungalows are being snapped up by end users. End users who don’t mind overpaying and being over exposed. The real shame in all of this is that the buyers for whom bungalows make the most sense are priced out of the market. That would be first time buyers (who can`t afford an $800k mortgage) that want a 2 bedroom home they can grow into and expand over time, and the aging baby boomers who are starting to feel overwhelmed by climbing stairs and hate the idea of living in a condo. I feel bad for these buyers in this market. In fact I feel bad for all buyers.
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Who am I? A Realtor, Goal Scorer, Gluten Addict. I Like: Writing, Labatt 50, Russian Vodka, Smoking Meat, Fantasy Football. I Dislike: Light Beer, Oatmeal, Open Toe Sandals, Jackass Realtors. The Scoop: No mortgage calculators, toothless (and grammatically challenged) copy or thinly veiled self-promotion on this site, just no holds barred commentary on what’s good, bad and damn funny about the Toronto real estate market. Enjoy.

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