Prices in Riverdale in many cases have practically doubled in the last 6-8 years. In my previous article “the value of neighbourhood”, I talked about a recent sale in Playter Estates (Broadview and Danforth) where a property sold for 400K over asking price and still required 400-600K worth of work. There were 7 bidders at this price level willing to undertake a major project. And this is no longer an isolated case. Just a few short years ago, breaking the 1 million mark was a novelty. 650-850k bought you a top notch home in the area. Today, a new, renovated home without any exceptional features (like a large lot) can go for close to 2 million.
These are the questions I hear form many Riverdale residents and clients:
Is Riverdale in a bubble? Has it gone too far? Have the prices been artificially inflated? Can they be sustained or are they about to burst? Will the prices get adjusted downwards with time?
My Answer: Not a chance!
First of all, let’s look at what causes a bubble to form and what causes it to burst.
A bubble can happen at a macro or micro scale – from globally (the last financial crisis) to a specific neighbourhood (most of the US market, predominantly South Florida, Arizona, Vegas, etc.). When prices rise too fast for too long, there is always a danger of a bubble being created.
Market and prices are dictated by the buyers. They want a specific area. They have qualified for proper financing. They are flocking to neighbourhoods that are established and provide the best urban living experience – safety, transportation, TTC access, downtown/uptown, major highways, schools (public and private), amenities, parks, restaurants, sports facilities, entertainment, architecture (type and size of homes, uniformity of construction, and aesthetic appeal of a street).
And they are willing to pay top price for it. Unlike Miami, this market is driven by consumers, not speculators. Unless there is a major cataclysm, chances are unlikely that there will be a mass exodus outside the area. People are coming in – not trying to sell out.
Buyers are willing to pay for what’s in demand. A good neighbourhood always attracts money and will remain the cornerstone of good living for which consumers are willing to pay a premium price.
- What used to be a transitional step/area has become a "go to" area
- Central core money flowing in. Buyers who wouldn’t have looked at Riverdale before are now seeing this area as a highly desirable neighbourhood.
- This brings a different, more affluent demographic of people able to afford a higher price. It was unheard of having 7 people compete on a 1 million $ reno project.
We will continue seeing strong demand.
Is this all about to change? Are prices about to adjust?
Yes. Higher.
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Tagged as:
Buying an investment property,
Real Estate,
Real Estate Bubble,
Riverdale
Is Riverdale in a Bubble?
Prices in Riverdale in many cases have practically doubled in the last 6-8 years. In my previous article “the value of neighbourhood”, I talked about a recent sale in Playter Estates (Broadview and Danforth) where a property sold for 400K over asking price and still required 400-600K worth of work. There were 7 bidders at this price level willing to undertake a major project. And this is no longer an isolated case. Just a few short years ago, breaking the 1 million mark was a novelty. 650-850k bought you a top notch home in the area. Today, a new, renovated home without any exceptional features (like a large lot) can go for close to 2 million.
These are the questions I hear form many Riverdale residents and clients:
Is Riverdale in a bubble? Has it gone too far? Have the prices been artificially inflated? Can they be sustained or are they about to burst? Will the prices get adjusted downwards with time?
My Answer: Not a chance!
First of all, let’s look at what causes a bubble to form and what causes it to burst.
A bubble can happen at a macro or micro scale – from globally (the last financial crisis) to a specific neighbourhood (most of the US market, predominantly South Florida, Arizona, Vegas, etc.). When prices rise too fast for too long, there is always a danger of a bubble being created.
Market and prices are dictated by the buyers. They want a specific area. They have qualified for proper financing. They are flocking to neighbourhoods that are established and provide the best urban living experience – safety, transportation, TTC access, downtown/uptown, major highways, schools (public and private), amenities, parks, restaurants, sports facilities, entertainment, architecture (type and size of homes, uniformity of construction, and aesthetic appeal of a street).
And they are willing to pay top price for it. Unlike Miami, this market is driven by consumers, not speculators. Unless there is a major cataclysm, chances are unlikely that there will be a mass exodus outside the area. People are coming in – not trying to sell out.
Buyers are willing to pay for what’s in demand. A good neighbourhood always attracts money and will remain the cornerstone of good living for which consumers are willing to pay a premium price.
We will continue seeing strong demand.
Is this all about to change? Are prices about to adjust?
Yes. Higher.
Add your feedback and comments below!... We'd love to hear your thoughts on this topic.
Put Vlad's Seller's expertise to work for you!... If you're looking to sell your home, contact Vlad now to get it done right.
Know someone who is selling their home?... Use the link below to Share or Email this article so they too can benefit from this knowledge.
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Tagged as: Buying an investment property, Real Estate, Real Estate Bubble, Riverdale