The Chase: One couple resists the lure of suburbia for a few more precious years downtown
The Chase: One couple resists the lure of suburbia for a few more precious years downtown
The Buyers: Erica Smith, a 34-year-old real estate agent with Condo Chicks, and her fiancé, Marc Puddy, a 37-year-old insurance executive.
The Story: Smith and Puddy started looking for a place together after they got engaged in November. Torn between the large lots of the suburbs and their love of downtown, the couple looked at houses in Etobicoke and Port Credit as well as condos in the core. “Condos are getting smaller and smaller. It’s hard to find one that feels like a home,” Smith says. They needed room for their dog and a home office, as well as two parking spots. They set an upper limit of $1 million—preferably less if they opted for the burbs—and started their search.
OPTION 1
Ravensbourne Crescent (near Eglinton and Islington). Listed at $899,000. Now off the market.
This Etobicoke home was large—4,000 square feet—but it was built in the ’60s and needed a lot of work, especially in the kitchen and bathrooms. “We’re both so busy we didn’t want to come home every day to a big project,” Smith says. Another downside: the hour-long commute to work, which seemed less tolerable the more they thought about it.
OPTION 2Lombard Street (near Queen and Church). Listed at $499,000, sold for $419,000.
A spacious 1,200 square feet, this fifth-floor condo felt more house-like than a lot of downtown units. It had a big kitchen and other condo rarities: a wood-burning fireplace and a master bedroom that could fit a king-size bed. They loved the space, but they love their miniature greyhound, Tucker, more—the building’s no-pets policy killed any chance of a deal.
THE BUYGeorge Street (near Richmond). Listed at $825,000, sold for $800,000.
“When we found this place, it was pretty much a done deal,” Smith says. The 1,200-square-foot two-bedroom condo was still under construction, but it wouldn’t need any work. It was pet-friendly and had two parking spots. The unit had been released for sale several months earlier, so Smith and Puddy went in low with an offer of $740,000. The developer refused to look at anything that didn’t start with an eight, so they came back with an even $800,000, and their offer was accepted. They love their new place downtown—even if they know it won’t last. They’re planning to start a family in the next few years, and they figure they won’t be able to resist the temptation of a house with a lawn.
(Images: Couple by John Cullen; homes by Rachel Wine)
. Listed at $899,000. Now off the market.
This Etobicoke home was large—4,000 square feet—but it was built in the ’60s and needed a lot of work, especially in the kitchen and bathrooms. “We’re both so busy we didn’t want to come home every day to a big project,” Smith says. Another downside: the hour-long commute to work, which seemed less tolerable the more they thought about it.
OPTION 2
Lombard Street (near Queen and Church). Listed at $499,000, sold for $419,000.
A spacious 1,200 square feet, this fifth-floor condo felt more house-like than a lot of downtown units. It had a big kitchen and other condo rarities: a wood-burning fireplace and a master bedroom that could fit a king-size bed. They loved the space, but they love their miniature greyhound, Tucker, more—the building’s no-pets policy killed any chance of a deal.
THE BUY
George Street (near Richmond). Listed at $825,000, sold for $800,000.
“When we found this place, it was pretty much a done deal,” Smith says. The 1,200-square-foot two-bedroom condo was still under construction, but it wouldn’t need any work. It was pet-friendly and had two parking spots. The unit had been released for sale several months earlier, so Smith and Puddy went in low with an offer of $740,000. The developer refused to look at anything that didn’t start with an eight, so they came back with an even $800,000, and their offer was accepted. They love their new place downtown—even if they know it won’t last. They’re planning to start a family in the next few years, and they figure they won’t be able to resist the temptation of a house with a lawn.
(Images: Couple by John Cullen; homes by Rachel Wine)){kind=link}
East-end downtown =/= downtown.
Best of luck to this couple. That being said, what’s with the 8x-plus median income just to purchase a house? And where are people coming up with these huge amounts of cash? No one I know could afford this, and I’m a working professional.
So they bought an $800k condo to live in for a few years. Assuming few is 3 and selling costs 6% commission… then they will lose $48K to sell or $16K per year… or basically they could have just rented. The average stooge is going to take a bath by following this example. Best’o’Luck!
I hope they stick to their plan and get out soon because once the baby boomers age further and start selling all of their over-priced real estate, they’ll be lucky to recoup very much of that $800k.
$800,000 for a 1,200 square foot CONDO!?!? Anyone looking in that price range could have found a far, far better investment in this city.
800K for a condo to stay in for a few years. How strange is that. Better to rent for those (few years) then buy that single family home at cheaper prices.
800K for 1200 sq. ft is $666 per sq ft, and that’s a bit steep for that location. Something under $600 per sq ft would be better.
To those who recommend cashing out and renting: don’t we expect real estate to continue going up in value? If so, it makes more sense to stay invested in the market – if only to keep up with it.
Remember, it’s not that Real Estate prices CAN’T go down, it’s just unlikely in Toronto over the next few years.
@John Helfrich
Real estate prices unlikely to go down? In case you missed the memo, prices actually peaked in the GTA four months ago, with the average hitting $485,520. Most recent number for July was $459,122 representing a drop of 5.4% in little more than 100 days. Annualize that negative trend and you get a potential 15% drop coming our way by next year.
And here is TD Bank echoing their own view that real estate is going to be correcting:
http://www.moneyville.ca/article/848301–td-forecasts-10-drop-in-home-prices
I’m on board with many comments here, but remember that one of the buyers is an agent, which means she keeps the commission when she sells her place.
I’ll agree though… $800K for a condo, with condo fees to boot, is a little rich. Even if their ceiling was $1MIL they could have bought a nice house for that kinda scratch.
at the end of the day, it’s their money – so they can do as they please!
i suppose a biggish issue with condos anywhere anytime is the inability to add value. in a crisis you need to have something in the ‘potential’ arena that you can big up – well chosen freehold/ stand alone is great for this, apts ehhh notsomuch. this is an 75+ purchase for when you are preparing to join the ancestry and dont give a monkeys about financial legacy. that said toronto is a great city and who can fault them for wanting to be in the middle of it.
To all you haters out there that missed the market. Let me say this…Real Estate prices will be higher next year!!! So hate on!!!
1. The real estate market is up vs Year Ago and continues to trend upward. Lending rates have never been better. You can lock in for less than 3.69 now. Variable is way cheaper so they’re smiling right to the bank most likely.
2. As the buying agent for the condo, the new owner pocketed the commission. Down the road, as the selling agent, that same owner will save the commission.
3. There are new condos being built in the downtown core for $600+ sq ft. This isn’t new.
4. There’s always a market to rent in the downtown core. They can potentially leverage their property equity and buy with 5% down elsewhere while still owning a piece of prime downtown real estate (that includes 2 parking spaces which can be rented out for additional income).
Not sure what all the nay-sayers are talking about…
While not to wish anything bad on this couple. This is was an extremely bad move and money will be lost! WHY NOT RENT?!?
“One couple resists the lure of suburbia for A FEW MORE PRECIOUS YEARS downtown”
Sorry guys, you will be living there a lot longer then that unless you don’t mind selling it for a massive loss. Did this couple not just look at the price-to-rent ratios? They could have lived those “few more precious years” in much bigger accommodations for their $. Or rented something the same size and saved the extra to buy a house in the burbs later.
The Wall Street Ranter
Don’t be fooled dummies. This is purely an advertisement for condo chicks. They probably bought the unit and will rent it out so not much of a loss there. The market has already slowed down and i can guarantee that these two won’t be having kids or getting married any time soon…