Melissa Hart is ranting. And what she has to say is both hilarious and heartbreaking for anyone who just wants what their parents and their grandparents had.
For three weeks now the 30-year-old Toronto woman has been venting online and she has a fast-growing following — house hunters, and even realtors, who agree with her frank assessments of “Ridiculous Toronto Real Estate” on a blog called FML Listings.
The site, a kind of anti-MLS, was born of Hart’s three-year search for a house she and her 33-year-old husband can afford. It has touched a nerve among homebuyers who feel locked out of the market and confused by an industry that speaks in code.
Well, Hart has cracked it. And she’s done the math.
That tiny North York bungalow listed on MLS for $996,000? It’s “NOT anywhere near transit, NOT anywhere near shops, NOT renovated or upgraded in any way shape or form, and there is NO living room as it’s been converted into a bedroom,” Hart writes.
Okay, it does have a skylight.
“If you’re counting, that means your deposit needs to be MINIMUM 200k, and your Land Transfer Tax is $32,000.”
Hart rails against realtors who create “false hope” by deliberately underpricing homes to create emotional bidding wars. She laughs at the $829,000 west-end home that needs a complete overhaul but “produces.”
“The listing says there are fruit trees in the front that, luckily for you, come with the house.”
The M and L in FML Listings stands for My Life. The F is … well, symbolic of the frustration which Hart has unwittingly tapped into among househunters struggling to stay in the city but battered by bully offers and fearful they are doomed to live in glass-and-steel condos forever.
She’s heard from a father of two who grew up in a blue-collar Etobicoke neighbourhood and can’t break back in on his white-collar salary.
“I’ve also had a lot of realtors email me. I was so afraid they would say, ‘You don’t know what you are talking about. Go buy a house in Whitby.’
“But I’ve had a lot of them praise me, saying thanks for showing what’s going on right now.”
Hart is an advertising project manager. Her husband, Brian Wolk, works in IT.
They aren’t naïve first-time buyers. They’ve owned a condo and traded up to their 1,800-square-foot “dream home” in Richmond Hill four years ago. But they decided to lease it out and move into a rented downtown condo when their commute escalated from 1½ to three hours daily.
But they found virtually nothing under half a million dollars within transit distance of their downtown jobs that didn’t need tens of thousands in renovations. They came close to bidding on a North York bungalow but decided it was too much to handle at $499,000.
Recently its smaller neighbour went on MLS for $858,000.
“If you’re counting, that’s a $359,000 rise in price in 2 years. Seems totally in line with inflation,” Hart blogs.
The couple gets supply and demand. But they see that equation getting wildly out of whack in the GTA where real estate prices have doubled in the last decade and become barely bearable only because of the lowest interest rates in history.
Adding to upward pressure has been what Toronto realtor John Pasalis calls “a massive surge in demand” coupled with an unusual shortage of listings the last two years.
Veteran realtors were stunned recently when three derelict Toronto Community Housing Corp. homes, needing tens of thousands in renovations, had dozens of offers and went for a combined $602,000 over asking price.
Some agents are bracing for another spring like last when the usual rush of warm-weather listings didn’t materialize, driving up demand — and prices — especially in coveted neighbourhoods close to transit and good schools.
“One of the things people don’t talk about is that the urban family has come back full force in the last 10 years. People aren’t, by default, moving to the suburbs the way they used to when they have kids. It’s a significant trend that’s really helping drive up house prices,” says Pasalis of Leslieville’s Realosophy Realty.
“We’ve got clients stuck where they are because there’s nowhere to move up to,” says veteran agent Tom Cook, who advises people to buy first and sell later.
“We’ve asked other agents, we’ve asked economists, we’ve brainstormed amongst ourselves — why aren’t people listing their houses? Some people say it’s the economy, but that doesn’t make sense because there are lots of buyers out there.”
Realtors and housing experts cite a number of possible factors: Baby boomers who are in their peak earning years and too worried about their jobs, the economy and buying down unprecedented levels of personal debt to move.
They’re also working longer and unlikely to downsize for years, which may be creating a bottleneck of sorts in the housing market, much the way boomers are impacting the workplace.
Instead, folks are making do and fixing up with the money they would otherwise spend on real estate and legal fees: Statistics Canada says renovation spending grew 40 per cent across Ontario in the five years up to the end of last September.
The Toronto Real Estate Board says Toronto’s four-year-old land-transfer tax, which Mayor Rob Ford has been slow to eliminate as promised, is also impacting inventory. It, alone, adds about $6,000 in upfront costs to the price of a $500,000 home and is believed to be putting some folks off moving.
At the same time, the construction of single-family homes, row houses and townhouses has plummeted across the GTA as provincial greenbelt policies fuel an explosion in condo development.
“Anybody looking to buy a house in the city is looking at a scarce resource that was manufactured 50 or more years ago,” says James McKellar, associate dean in the real estate and infrastructure program at York University’s Schulich School of Business.
“What you’ve got is basically a limited supply and growing demand.”
Demand is becoming especially fierce along transit lines where condo developers are looking for dwindling building sites and house prices have become especially astronomical, largely because of the land, notes McKellar.
Hart reserves a particular brand of sarcasm on her blog for those places — the million-dollar teardowns.
The blog was born after Hart toured an east-end home that looked okay online. (Don’t get her started on MLS photos, which are often distorted by the use of wide or long lens.)
“In real life it was a shack — a total garbage house. I posted it on Facebook and all my friends couldn’t believe it.” They urged her to post more.
“After going through this for almost four years, you think you are alone. You think, ‘Am I crazy? Is this what a million dollars gets you?’”
She’d be happy at this point with a $500,000 semi almost anywhere in the city, as long as it didn’t have mould, need rewiring and $100,000 in renos.
“The blog really helps me release a lot of stress. I don’t know what I’d do without it.”
The Toronto Real Estate Board says there is a cost to the convenience of living in the city: $465,000 on average, and expect that to hit $485,000 this year. (A detached Toronto house cost an average $606,000 in January, up 50 per cent in five years.)
Bidding wars are isolated incidents, says TREB senior analyst Jason Mercer. Statistics show most Toronto houses sell for 99 per cent of list price, he says.
You can still get a condo for $343,834, on average, a townhouse runs about $410,000. Some 52 per cent of detached homes (1,100 properties) listed on TREB’s MLS system in January sold for under $500,000, says Mercer.
But he concedes low inventory is having an impact. Less than 12,000 homes were for sale in the GTA last month, down from the usual 15,000 or 16,000 during what’s already a slow time of year for sales.
While that’s pushed up prices, TREB believes it will also free up supply as homeowners use the added equity to buy up or cash out.
The only problem is, they still have to find someplace to live.
Which brings us back to Hart and her husband.
Their Richmond Hill house is up for sale so they can move quickly if they find a place. Hart isn’t holding her breath — like many — thinking this is a bubble that will burst. She just hopes interest rates edge up enough to dampen demand.
Friends tell her she needs to find a way to monetize the blog. That would mean running ads — real estate ads.
“That would make me the biggest hypocrite in the entire world,” Hart says with a laugh.
“I don’t want the money. I’d rather not have the blog … I just want to have a house.”