COVID and the housing market | Page 253 | GTAMotorcycle.com

COVID and the housing market

Mad Mike said:
2x4 down from $10 to <$6 at Home Depot.
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Not back to pre-COVID prices (~$3) but I don't think we will ever hit that again.
5 or even 6 dollars looks to be the new normal
 
mimico_polak said:
Thanks for that Mike, always good to see what's what from people in the business.

As always...I'd be super interested in doing what you do...but I have no clue about Timmins market, or able to take that much time off from my work.

I'm going to keep my eyes open though because if the market starts cratering like I expect in the outskirts...maybe there's something out there for me also.
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Let's flip a house 😄
 
on my and neighboring street there are three houses what are currently being gutted with no-one living in them for weeks now - I am assuming somebody is adding "value" to resell..
All these were bought at the latest price peak - Dec-Feb for close to 1Mil (these are tiny townhouses mind you). I can't wait to see if these will go back to the market and what price would be..
 
Sochi said:
on my and neighboring street there are three houses what are currently being gutted with no-one living in them for weeks now - I am assuming somebody is adding "value" to resell..
All these were bought at the latest price peak - Dec-Feb for close to 1Mil (these are tiny townhouses mind you). I can't wait to see if these will go back to the market and what price would be..
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I feel sorry for the future buyers. Those are probably the worst possible houses to buy. Gutted and refinished by somebody with profit as their sole motivation in a falling market. 100% chance many problems will be buried and every possible hidden corner cut. Probably still have good looking finishes though (that will need to be thrown out shortly to fix the underlying issues).

EDIT:
The price I would pay for most flips maxes out at the price of the unmolested house. Obviously lots of people are blinded by pretty finishes. Maybe there are some good flippers but I haven't seen one yet. People that renovate to live in or rent are different. They care about underlying issues as they will be stuck with them.
 
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Sochi said:
on my and neighboring street there are three houses what are currently being gutted with no-one living in them for weeks now - I am assuming somebody is adding "value" to resell..
All these were bought at the latest price peak - Dec-Feb for close to 1Mil (these are tiny townhouses mind you). I can't wait to see if these will go back to the market and what price would be..
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My biggest 'miss' when we were looking for a house originally was not buying a mid-flip property.

Contractor ripped out EVERYTHING down to the studs. It was the perfect property in a good area but they ran out of money mid way (apparently).

Basically buy a house where half the work is done, and you get to start with the bones. Winston Churchill and Benedet south of the QEW. Even then (5-7 years ago) the amount of interest in that property was ridiculous.
 
mimico_polak said:
My biggest 'miss' when we were looking for a house originally was not buying a mid-flip property.

Contractor ripped out EVERYTHING down to the studs. It was the perfect property in a good area but they ran out of money mid way (apparently).

Basically buy a house where half the work is done, and you get to start with the bones. Winston Churchill and Benedet south of the QEW. Even then (5-7 years ago) the amount of interest in that property was ridiculous.
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One of those was recently for sale in Barrie for 1M. Sold for 1M. Yikes.



One of the houses I contemplated when looking for my current house was an old school house on a hill that gutted. Would have been a cool project but I needed a house I could live in without my wife divorcing me. I didn't have a spare seven figures to have a second project house.
 
GreyGhost said:
I feel sorry for the future buyers. Those are probably the worst possible houses to buy. Gutted and refinished by somebody with profit as their sole motivation in a falling market. 100% chance many problems will be buried and every possible hidden corner cut. Probably still have good looking finishes though (that will need to be thrown out shortly to fix the underlying issues).
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Yes -- I've bumped into a few of these. When I was in high school, we used to do 'slap and pack' car restorations - take an old rusty car, slap bondo or fiberglass over everything rusty and paint. We got really good at blocking, the cars looked great... for a year and people were eager to buy them.

Fast forward to 2020 and this is common in house flip-rehabs. Crooked walls and floors -- no prob, slice and scab to straighten them. Move a bathroom - no worries, nobody sees cut joists, deviant plumbing and hidden electrical connections once drywall is up. Leaky basement - that's why they invented FlexSeal.
 
Mad Mike said:
Yes -- I've bumped into a few of these. When I was in high school, we used to do 'slap and pack' car restorations - take an old rusty car, slap bondo or fiberglass over everything rusty and paint. We got really good at blocking, the cars looked great... for a year and people were eager to buy them.

Fast forward to 2020 and this is common in house flip-rehabs. Crooked walls and floors -- no prob, slice and scab to straighten them. Move a bathroom - no worries, nobody sees cut joists, deviant plumbing and hidden electrical connections once drywall is up. Leaky basement - that's why they invented FlexSeal.
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Like my old realtor said 'Majority of the people are idiots, and don't know what a garbage flip looks like. Throw some new paint in, a cheap granite countertop, cheap bathroom, and the cheapest floor you can find. They don't care it's cheap...they care it looks nice.'
 
GreyGhost said:
I feel sorry for the future buyers. Those are probably the worst possible houses to buy. Gutted and refinished by somebody with profit as their sole motivation in a falling market. 100% chance many problems will be buried and every possible hidden corner cut. Probably still have good looking finishes though (that will need to be thrown out shortly to fix the underlying issues).

EDIT:
The price I would pay for most flips maxes out at the price of the unmolested house. Obviously lots of people are blinded by pretty finishes. Maybe there are some good flippers but I haven't seen one yet. People that renovate to live in or rent are different. They care about underlying issues as they will be stuck with them.
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I would assume the worst and want money off the unmolested price. It costs to rip out the new stuff to do it right.
 
Mad Mike said:
Prices increased across Ontario like a Tsunami wave with the GTA as the epicenter, the further away the later your prices surge. When things cool off, it happens in reverse -- outlying areas drop first, the GTA last. It's happening -- Brampton, Oakville, Hammer, Barrie, Shawa, Newmarket ... all down double digits from the peak. The GTA is down too, but close in areas that are built out Pickering, Markham should behave in step with Toronto.
Zolo StatsPeak PriceNow PricePrice Change% Change
LocationSpring '22Jul 2022from Peakfrom Peak1 mo3 moYear
Barrie$979$792-$187-19.1%-6.4%-13.6%5.8%
Brampton$1,369$1,066-$303-22.1%-5.8%-18.7%5.3%
Hamilton$1,058$888-$170-16.1%-4.0%-12.6%7.6%
Markham$1,501$1,344-$157-10.5%-0.7%-4.1%12.4%
Milton$1,375$1,079-$296-21.5%-11.2%-14.5%2.5%
Newmarket$1,456$1,118-$338-23.2%-7.3%-15.8%2.0%
Oakville$1,815$1,400-$415-22.9%-2.1%-23.6%-5.7%
Oshawa$1,066$819-$247-23.2%-1.7%-17.2%2.4%
Pickering$1,342$1,156-$186-13.9%5.2%-2.7%12.4%
Richmond Hill$1,586$1,360-$226-14.2%-5.7%-14.5%5.5%
Toronto$1,252$1,157-$95-7.6%-5.9%-4.4%7.2%
I dabble in small low-cost houses way up north. In 2020 you could find fixer-uppers for $50-100K, spend $25K to clean them up and you'd have a chance at $20-30K profit. Those fixer-uppers were selling at $100-200K this spring, unrenovated. I mentioned in an earlier post I was outbid on a couple, the listing price in April was $80, I offered $80 no conditions, the highest bidder won at $120. That place is available again at $80 as the winning buyer couldn't close -- I suspect to see it sell below asking, my $60K low ball offer might just do it!
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I'm thinking of someone who sold when they thought the market was at peak in TO, hoping to buy back in after the crash.

If I understand the chart correctly TO hasn't lost all the gains of the last year so their timing wasn't right. Continued declines may correct that but a lot depends on when they sold, what they had and what they expect to buy into. Some market segments will fare better.
 
Sochi said:
on my and neighboring street there are three houses what are currently being gutted with no-one living in them for weeks now - I am assuming somebody is adding "value" to resell..
All these were bought at the latest price peak - Dec-Feb for close to 1Mil (these are tiny townhouses mind you). I can't wait to see if these will go back to the market and what price would be..
Click to expand...
If I were doing those places I'd put things on hold for a bit. House prices and building material prices are declining. I expect the price of contractors will start coming down soon as cheap money and WFH were fuel for the flurry of renos and rising house prices.

I'm sure a lot of flippers will be second-guessing whether granite, Toto, and Pella will remain in the reno budget.
 
Mad Mike said:
If I were doing those places I'd put things on hold for a bit. House prices and building material prices are declining. I expect the price of contractors will start coming down soon as cheap money and WFH were fuel for the flurry of renos and rising house prices.

I'm sure a lot of flippers will be second-guessing whether granite, Toto, and Pella will remain in the reno budget.
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If they get rid of the nice finishes and fast-turns, what do flippers have left? The whole business model is predicated on a quick turd polish. They have no idea how to properly renovate a house to improve it.
 
Mad Mike said:
If I were doing those places I'd put things on hold for a bit. House prices and building material prices are declining. I expect the price of contractors will start coming down soon as cheap money and WFH were fuel for the flurry of renos and rising house prices.

I'm sure a lot of flippers will be second-guessing whether granite, Toto, and Pella will remain in the reno budget.
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you got it :)
2 houses are completely gutted right now and there is absolutely no activity in them with windows covered with black plastic from inside. totally empty for a few weeks now..
 
GreyGhost said:
If they get rid of the nice finishes and fast-turns, what do flippers have left? The whole business model is predicated on a quick turd polish. They have no idea how to properly renovate a house to improve it.
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What happens is the turds get discounted appropriately and the skip and pack flippers get squeezed when buyers can request home inspections without the hype and pressure of an auction market.

High demand areas will still see cheesed up flips, but they will fisappear quickly in outlying areas. I'll bet fixer uppers in the 300s reappear in the outlying gta soon.
 
Mad Mike said:
What happens is the turds get discounted appropriately and the skip and pack flippers get squeezed when buyers can request home inspections without the hype and pressure of an auction market.

High demand areas will still see cheesed up flips, but they will fisappear quickly in outlying areas. I'll bet fixer uppers in the 300s reappear in the outlying gta soon.
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A "good" flipper should be able to bury most of their sins so a home inspection can't find them. It's the buried junctions, neutral tied to ground, unglued plumbing, cut joists, etc that ruins the house and is impossible to see or fix without tearing it apart again.
 
GreyGhost said:
A "good" flipper should be able to bury most of their sins so a home inspection can't find them. It's the buried junctions, neutral tied to ground, unglued plumbing, cut joists, etc that ruins the house and is impossible to see or fix without tearing it apart again.
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As I understand it, inspectors are not allowed to remove anything to 'look deeper' so yeah, pretty easy to put lipstick on a pig!
 
Small, starter house here in St. Catharines in a decent but not great area was purchased by a guy in Markham about 6 weeks ago (market peak here I think) for $450K. He & 4 or 5 friends put lipstick on that pig in about 5 days then put it back on the market for $525K. Market was just turning so NO takers. Lowered the price to $475K a couple weeks later and NO takers. Relisted it last week for $399K, hoping for a bidding war I suppose? That apparently created lots of traffic but, he had a bid reveal last night .... so far NO for sale sign. Not sure what his next move is. Apparently he doesn't want to rent it although that could change as he'll have carrying costs.
 
Green Meenie said:
Small, starter house here in St. Catharines in a decent but not great area was purchased by a guy in Markham about 6 weeks ago (market peak here I think) for $450K. He & 4 or 5 friends put lipstick on that pig in about 5 days then put it back on the market for $525K. Market was just turning so NO takers. Lowered the price to $475K a couple weeks later and NO takers. Relisted it last week for $399K, hoping for a bidding war I suppose? That apparently created lots of traffic but, he had a bid reveal last night .... so far NO for sale sign. Not sure what his next move is. Apparently he doesn't want to rent it although that could change as he'll have carrying costs.
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Expect more of that. 60 days ago people bought anything on frenzied bidding. Ez come ez go for dumb money, that owner might now be over leveraged now. Quick flips often use expensive short term loans, add in tax, utilities, unoccupied insurance costs and ongoing maintenance... could easily be bleeding $2500/mo in cash ,WHILE watching the value of his investment decline daily.

30 years ago I was that guy. Watching my paper fortune burn was no fun.
 
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