Have you noticed that many (but not all) of the new homes on 25’ wide lots north of Lawrence in North Toronto seem to be sitting on the market and not selling lately? Have you been wondering why? Well, there could be countless reasons as to why a home hasn’t sold. And since every home is different, the reasons for a home not selling may vary from one home to another. Here are a few general reasons to consider:

List price is too high: Builders build homes for one reason – to make money. Their goal is to make as much money as possible. Many of them choose high list prices hoping to find an uneducated buyer who doesn’t do any due diligence and unwittingly pays a high price. Other builders might have paid too much for their land and need to sell at a high price so they don’t lose money. Either way, homes that are listed too high rarely sell.

Educated buyers: Most buyers, and the Realtors who represent them, are very educated. They’re aware of all the recent comparable sales and have no interest in paying a high price. They’re content to wait for the builder to become more realistic.

Picky buyers: I say picky, but I could also say discerning. They know what they want and they’re prepared to wait for it. Many of the buyers for these homes already live in the neighbourhood. They’re happy in their current homes and aren’t desperate to move, but they’d like more space or something newer so when the right home comes along at the right price, they’ll buy it.

Poor workmanship: Buyers who pay close to $2,000,000 for a new home expect a high level of quality. Builders who think they can cut corners to save money and get away with shoddy workmanship are only fooling themselves.

Poor design: Some of these homes have layouts that don’t match what most buyers want. A 3 bedroom home with no main floor family room and with each bedroom on a different level isn’t going to appeal to most people in a family oriented neighbourhood. When you build homes to make money, you need to give the people what they want.

Poor location: Buyers are prepared to wait for the right home in the right location. Builders need to build to make money. Sometimes builders can’t wait for a building lot in the best location and have to settle for something that is less than ideal. Some buyers might consider it, but only at a lower price (see List price is too high above).

New home premium: New cars cost more than used cars, even if the used car is only a month old. The same holds true for new homes. Is it worth it to you to pay an extra $50,000-$200,000, approximately, for a brand new home or could you be just as content with a home that’s a few years old and a lot of extra money in your bank account?

The value proposition: This is the big one. There are plenty of buyers out there who’re ready to move when they find the right home and when the price makes sense. It has to make sense with respect to the comparable sales so a builder who really wants to sell should factor in the quality of construction, the location, the size of the home, etc. The price also has to make sense with respect to the prices of other alternatives. Right now, most new homes are priced almost as high as some homes on 50’ wide lots in Lytton Park west of Avenue Road. Some people, and I’m one of them, are saying that Lytton Park is Undervalued. This makes those homes an attractive alternative to some buyers.

Not all of these reasons apply to all new homes and there may be other reasons as to why a home isn’t selling, as well. If you’d like my take on a particular home, feel free to ask me.

And in the meantime, if you know of anyone who’s looking for an honest realtor who really knows his stuff and doesn’t pressure his clients, Please Don’t Keep Me a Secret. I really appreciate your referrals. Thanks for reading and don’t be shy if you have any questions or comments!