January 2021 GTA real estate review.
We sit down to talk with Jack Cherry, a Toronto real estate agent with the Cherry + Mangano team at Sage Real Estate to talk about the January 2021 GTA real estate market.
We discuss how 2021 started and what’s happening with the condo market in Toronto. Join us for the full discussion below:
Jack Cherry’s contact info:
Don’t feel like watching? Find the full transcript below!
Chris: [00:00:00] Today, I’m joined by a very special guest and friend, Jack Cherry, a realtor with the Cherry Mangano team at Sage Real Estate. Jack, welcome. How are you?
Jack: [00:00:12] Good, good. Thanks for having me. I threw on my air pods just to match you as well,
Chris: [00:00:18] So helpful, so useful. Jack, Yesterday, Treb released the real estate numbers, and I’m finding them to be always a lot of curiosity around the numbers and what it’s actually telling us. And one thing is what the statistics are. The other thing, as you know, is what’s actually happening at the street level. And you as a realtor have a unique perspective on this. So I’m wondering what the talking points that you see out of those numbers and what you’re actually experiencing at the street level and especially with the condo market. So go ahead, tell me.
Rebound in the condo market
Jack: [00:00:59] Yeah, definitely. I mean, the free market just’s a train that can’t be stopped. So it’s a lot more interesting right now with the stats coming out to talk about the condo market, condo market. We’ve seen total GTA year over year. We’re down about 8%. But if you look strictly at the core, it was actually down 16%. Now, that that’s not a true reflection of what is currently going on, as you said, street level with the condo market, we knew the condo market would come back. We thought it would be sort of a U-shaped recovery. But we’re finding that it has bounced back a lot quicker than we anticipated. And it’s more like a V shape, very basic. One-bedroom condos all of a sudden are getting three-plus offers.
Chris: [00:01:51] No way.
Jack: [00:01:53] Multiple offers all across the GTA and in condos. We brought out two condos last Monday, very different areas. One was at young Summerhill, one was at St. Clair and Wharton. Both were sold firm in 48 hours, the one that Young and Summer Hill was under 600 square feet and we almost got $1350 per square foot. So no great bounce back quickly. Yes.
Chris: [00:02:21] Oh my gosh. So hold on a second. So the, the stats that have come out are saying 8% across the GTA. That’s in terms of volume of sales. Yes. We’re not talking price, we’re talking volume of sales. So volume and sales is down compared to last January for condos, which is perhaps not surprising. There have been some reports that came out for Q4 for condos showing that they were way down. It’s pricing down as well, according to the statistics that have come out, because, I mean, when you see what you just shared with us is that prices are actually accelerating in that market. So just help me understand that.
Prices are up despite a reduction in sales
Jack: [00:03:01] Yes, overall, they’re still down from pre-pandemic. But the recovery has happened and where we’re already close to, if not getting to pre-pandemic prices. And I think we’ll get there very soon. Right.
Chris: [00:03:18] So if anybody so I mean, most of the condos, the premise was that with people exiting the downtown core, a lot of the condos are tenanted, very big rental pool. So tenants weren’t coming to the city. No students offices were closed. So there was a thinking that a lot of investors would be flooding the market with their condos. So are you seeing in terms of inventory versus demand, how do you position those two? How do you observe things in terms of supply and demand late last year?
Jack: [00:03:55] And also another factor was the Airbnb rule change that came up here. We saw a ton of units flood the market, not a lot of buyers out looking. And yet prices plunged because of what we have seen this year is, as I just spoke about, we’re seeing units, very basic units sell within 24 to 48 hours. There is a lack of product now. There’s always been a lack of product in the freehold market which helps it go at the rate it does. But right now there is far more buyers than product and we can’t keep up.
Changes to rental rules
Now, I know that I and other realtors are probably encouraging now. It’s a good time to sell so back as the weather gets better and as we get into the fall market, we’re going to see more and more listings come out. But at this point in time, yes, there’s a ton of buyers looking and not enough product to keep up.
Chris: [00:04:55] Are you finding the buyers are end-users. Is that what You’re observing? Because I wouldn’t imagine anybody rushing to buy a rental unit per se, with the rental prices being down, rents are way down year over year. So it must be end-users. Is that right?
Jack: [00:05:12] Yeah, that’s definitely what we’re finding a lot of first time home buyers trying to get into the market. They started looking late last year and prices are down. It’s a good time for me to get in. If they’ve missed the boat now, they are really trying to get in before prices come up even more.
We also found the market outside of the GTA is exploded right now. So there’d be buyers looking like I can get a two-bedroom here in Toronto or I can maybe go get a house and then they go start looking outside Toronto and they see they’re in multiple offers as well. And There’s Hamilton, Wulf and Barry. So that brings them back. They say if I’m getting if I’m paying these prices, that there maybe I will just go back to the core and spend my money, their low-interest rates, which you can speak about, of course.
Availability is driving growth
Chris: [00:06:05] Absolutely. It’s a huge driver, of course. And that’s one of the things that I kind of find interesting because rates are driving a lot of its growth at the moment. And so there’s speculation, well, when maybe I’ll wait until interest rates go up and prices will come down, but your relative carrying costs are still really the same because so maybe prices decelerate. I’m not sure that they’ll go down, but they may go flat. But now you’ve got higher carrying costs.
For many people, it’s about what’s my monthly payment, can I afford it? And not necessarily the price. So, compared to a pandemic, I mean, interest rates are down more than one percent, one and a half percent. So it’s a huge difference. And so what I’m hearing from you is despite all of our fears about the pandemic and all of the other drag that’s happening in the economy and all of these concerns due to real estate is driving.
Jack: [00:07:10] It’s driving. It’s yeah, it’s one of those things that I don’t know if a global pandemic can’t slow it down, I’m not sure what can I get. I get buyers that I speak to and they say, you know, I can say I can afford a million, but I don’t necessarily have to buy this year. Maybe I can look next year. And I’m just kind of telling you, a million this year is easily a million to next year. Let’s get in right away and. Yeah. And take advantage. Yeah.
Chris: [00:07:42] Yeah. You and I have seen that over the years that that wait and see. And that’s not an encouragement for people to buy more than, than what they can afford. I think that we don’t want to push people to do that. But the acceleration is a little bit frightening. And I think you opened up with the line. You know, the detached market is a train that just can’t be stopped.
Jack: [00:08:06] Yeah, absolutely. I mean, you just can’t build, you can build condos, but you can’t build houses anymore in the car or in prime areas. So and the demand just continues to be there. We’re a world-class city with a lot going on. So I, I just I don’t see us slowing down in that market any time soon. And then the condo market, I mean, there’s going to be some more ups and downs, but at the end of the day, that’s still a very good market to be in.
Getting in touch with Jack
Chris: [00:08:37] Yeah, I agree, Jack. Well, listen, I really appreciate your time and sharing your insights today. If anybody is watching this video and would like to learn a little bit more about you, what’s the best way to get in touch with Mr. Jack Cherry?
Jack: [00:08:53] Follow us on Instagram CherryandMangano. Shoot me an email. Yeah, just give any questions about the marketplace. Yeah. Happy to answer and chat about it. That’s what I do every day. So it’s, it’s fun for me.
Jack: [00:09:11] And before we leave, I want people should know how I met Chris actually was to your father. Yeah. When I first got licensed I remember you start figuring out how to put that, put together a roster of people around you. I remember calling my dad and saying, do you know any mortgage brokers? And you said, great, when are no older? Sure enough, I quickly gave me your contact. And the rest is history. But I just found it. That kind of a fun little story that we kind of met through our fathers.
Chris: [00:09:46] Yeah. You know, I should have led off with that. And I thank you for reminding me. I forgot that history goes back that far. And that’s true. So I. I have been. No. You to be the son of a broker, desirable Molder, and that’s the connection. So going back that far? Well, listen, Jack, I’ll include some of the contact information. Jack’s what you see is what you get very authentic. Great guy to chat with and encourage anybody who’s wondering about buying a condo, listing the condo or taking a deep dive off the deep end into the detached market to get in touch with Jack. Thanks so much again. And we’ll look forward to the next one, Jack.
Jack: [00:10:30] Thanks for having me, Chris.
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