Hannah fluffs for a living. Professionally it’s called ‘staging,’ but what she really does is make your house look like people wrapped in plastic live there who never use the bathroom, or eat. She doesn’t just get it cleaned. She transforms. If walls need to be quickly painted and toned, done. If your furniture is crap, it’s history. If there’s an open house planned, it’ll be impeccable, replete with flowers, casually-opened cookbooks and a $300 bottle of wine on the counter.
“I’ve had to completely empty some places,” she says. “Just shove everything in storage, send the family away and rescue the house.” She works with two assistants and an iPhone full of suppliers, including a furniture rental company heavy on fashion-forward sofas.
Hannah’s not cheap, of course. Two bedroom suites for a month and her attention for two hours costs about two grand. But in real estate hothouse like mid-town Toronto, where shoppers expect $1.8 million houses to be zine-ready, it’s the deal’s secret sauce.
Last spring you couldn’t even book her unless you decided in January you were selling in April. These days she’s available for a consultation in about a day, and a fluffing within a week. “Massive slowdown” she says. “It’s hard to believe.”
Indeed. Toronto sales are off 20% from last year, according to the realtors’ numbers. Street evidence suggests whatever the decline, it’s getting worse. Homeowners thinking of listing are recoiling on news of scant interest and softening prices. Most buyers are waiting for the big correction. And no more mortgage insurance on million-plus houses has hollowed the market, while jobs are starting to erase.
By the way, Hannah and her husband sold their home in a demand hood last year. They now rent a spacious condo high above the tree canopies. “Thank God,” she says softly.
Eight blocks from their building is a store which caters to moving. Crisp brown boxes, rolls of bubble pack, reams of paper, cardboard wardrobes, packing tape, neoprene floor runners, furniture quilts, rentable plastic containers, moving booties, forearm forklifts and mattress bags.
On the first Friday afternoon in April, the full flower of the spring real estate market, the place was empty. Jimmy was on cash, when he wasn’t offering a free cappuccino, espresso or latte. In mere minutes he was lamenting business. “Down 30 per cent, and falling. But at least I hear it’s not as bad as in, you know, Vancouver and Victoria.”
Compared to a year ago? “There were five of us in here on a shift,” he says. “Now, just two. It’s scary. The change in mortgages has really hit us hard, and it looks like buyers are all just waiting for prices to go down. Which I guess they will.”
Of course, this is anecdotal evidence of a market in distress. But these are folks whose entire livelihoods depend on people selling houses. They’re the canaries in the real estate coal mine, whose paycheques reflect market vicissitudes faster and more accurately than any manufactured realtor Frankenumber. Their story is being retold by the out-of-work movers who descend like ravenous locusts on any home where a SOLD sign sprouts.
Officially, GTA’s housing market is one of tumbling sales and static prices. The media is still carrying stories about bidding wars and frustrated buyers paying $900,000 for $750,000 homes. But that is the flotsam left floating on still waters. The economic reality is that fewer deals, month after month, lead inevitably to price reductions, lost equity and recent buyers left underwater.
This week the evidence seems overwhelming. Despite it being Spring, and with some of the lowest five-year mortgage rates in history, sales are cascading lower in Vancouver, Victoria and Toronto. Transactions in Ottawa last month were off 16%, and condo prices have turned negative for the year. In Montreal, same story – condo values retreating while SFH sales are down 15%. In Halifax volumes are running 28% below year-ago levels. Even Calgary, now afflicted by falling oil prices and shutdowns in the tar sands, sales are trailing 2012 numbers.
In BC, prices are lower 8% on average. In Ottawa and Montreal, up 1% over 2012. In Toronto, it’s a 3% gain over last Spring. As I always point out, all real estate is local. And big markets like the GTA are comprised of dozens of micro-markets, each with their own supply-demand dynamic.
But there’s no fighting the trend. Housing as an asset class has run its course, inflated to the point of ugly obesity by an endless diet of addictive cheap debt. All prices will be in decline as the year moves ahead. The buyers will triumph.
And we will live to fluff another day.
- Saskatoon Housing Bubble