What Factors Influence Where Buyers Want to Live?
I work with a lot of buyers who are looking for purchase their first house. Usually we’ll sit down very early on in their process to go over what they’re looking for in a home, and usually one of the most important criteria for them is the location.
Most of the time a buyer’s interest in a location has been well thought out. In other situations some buyers think they want to be in a certain neighbourhood, but reality is the lifestyle they’re looking for might suit another area even better. This is why I like to talk to them about location in extreme detail because it can be such a deciding factor when it comes to writing an offer on a home.
From my experience, real estate buyers in Toronto primarily consider a location’s characteristics for a couple reasons. The thing I always emphasize is to establish which of these factors is truly important to them, and which they can live without. From there, we’ll establish which Toronto neighbourhoods fit and which ones don’t.
A lot of buyers I work with are very interested in rankings for elementary schools. They’ll sound off the Fraser Ratings and EQAO scores for some school districts they’re considering, and it becomes very clear that the education their kids receive is extremely important to them and will play a major part in determining what neighbourhoods they’ll consider.
Top ranked schools tend to be in neighbourhoods that come with a big price tag, like Rosedale, Yonge and Eglinton, Lawrence Park or Forest Hill. There are also really good schools in some of the more trendy parts of the city, like in Riverdale and the Beaches in the East End, or Roncesvalles or around Trinity Bellwoods to the west.
There are also really good schools in other parts of the city, you just have to know where to look.
For example, if someone wants a brand new custom 4 bedroom home and their budget is $1.5 million, and getting into a top ranked school is their most important factor, we probably won’t be searching in the areas I mentioned above. I’ll usually show them homes in the Scarborough Bluffs and see if an area like that makes sense for them. The schools there can be quite good, and they can get the brand new detached home they want within that budget. We’ll go on a tour of the area to see a few homes, look at the local schools and amenities and let them digest if that type of lifestyle will work for their family.
Sometimes buyers come around to the idea of living in an area they’d never considered, and sometimes they adjust their criteria and look for a smaller home in a more expensive area. The key is being presented with different options that fulfill a major part of your home search.
2. Commute Time
This is a huge determining factor of where someone will buy a home in the GTA.
Often people have a set amount of time they’re willing to commute to work. Whether it’s 30 minutes, an hour, or two hours, this is often something people won’t budge on when considering the location of a potential property to purchase.
Beyond the basic time threshold, I also need to establish how a buyer will commute to work.
Are they taking the subway or streetcar, the Go Train, or are they driving? Each will determine potential locations that will work for them because each of those methods of transport moves at a different speed during rush hour.
The key is for me to be able to offer different solutions to a set commute time. Driving is often not going to work if your office is downtown and you’re on a tight schedule in the mornings. However, if someone says they want to be with 45 minutes of Union Station on the TTC, there are a variety of neighbourhood choices available.
In these situations I’ll usually schedule a tour and we’ll go see a couple homes in their preferred area, and then we’ll go see a few homes near a Go Train Station that will provide the same length commute for them to work. Even though we’re going farther out than they wanted, I can show them that they can still keep their commute time about the same by switching from Subway to Go Train. At that point it comes down to the lifestyle they’re looking for.
My role here is to help buyers consider all options for how to get to work and to not focus on just one mode of transport. People often focus on the option they know, so if someone has taken the streetcar for the past 5 years that’s probably all they’ve considered. Reality is that depending on what type of home they want, there could be other, better options available to them by just changing how they commute to work each day.
3. Wanting to be Somewhere Trendy and Fun
It’s no secret that Millenials are ditching cars and moving back into urban areas all over North America. This is very true in Toronto where many home buyers I work with want to be in neighbourhoods where there are plenty of things to do nearby. Millenials are choosing to walk, bike, Uber or take transit instead of driving, and as a result they often flock to areas where there are a couple cool coffee shops and a handful of nice restaurants within a 10-15 minute walk of their front door.
The number of people who put an emphasis on this is a big reason why an area like Leslieville has seen such a huge appreciation in home prices over the past 3-4 years, and such a strong recovery since the market corrected in April of 2017 (prices are essentially back to their 2017 highs).
I’ve been a Leslieville resident since 2011, and the neighbourhood has changed dramatically over that time. Way back when I first moved here, there was nowhere to go for a drink after 9 pm at night and dining options were somewhat limited.
Now, there are too many options to consider within 10 minutes of my home. People often ask, have you tried “Insert new restaurant’s name?”, and the majority of the time I respond with, “Nope.” There are simply too many places opening up, and I don’t go out enough to give them all a shot.
Reality is that I probably went out more 3+ years ago than I do now. What changed? My wife and I had kids.
Now instead of getting out on a regular basis to try the new spots, we usually go to the places we know are kid friendly, often opening them up around 5 pm and being gone by 6:30 so that we don’t get in the way once they’re busy.
The point I’m trying to make is that many people I work with choose to buy a home because of some major underlying motivational factor. Often it’s that they’re planning on having kids and need more space for what will be a growing family.
When planning that purchase though, a lot of people make location decisions around what will satisfy their current self vs what will satisfy them 5+ years down the road once they might have a couple little ones to look after. I often ask home owners how long they intend to live in a home. Generally the two sides of the fence are; 1. Is this a starter home you’ll be in for 3 to 5 years, or 2. Is this your forever home?
There’s a difference. And my goal is to help establish which one they really want.
The starter home is the home you buy emphasizing your current lifestyle, ie the next 5 years.
The forever home is the home you buy emphasizing your future lifestyle, ie 5-25+ years from now.
When I bring this up with clients it gets them thinking. Are they really going to care about new and cool restaurants opening around the corner from them in 5 years, or at that point are they going to be happy to eat at their “go to” where they know the server and the menu and they know they won’t get funny looks for walking in with a toddler?
I know which category I fell into, and as a professional who is helping people make good investment choices I try to reveal which option my clients truly want by asking questions, and to lay out the associated pros and cons that may accompany each option.
4. Proximity to their Family
This one can work both ways, but usually it only goes the nicer direction if it does come up.
In certain situations buyers will consider homes in a specific neighbourhood because a family member is there and they “need” to be closer to them.
This need could be based around a few things. Perhaps a family member has offered to help with child care. Maybe someone is sick and needs assistance. They might even just like each a whole lot. Each situation where this comes up is unique.
The desire to live near a family member one isn’t a criteria that comes up often, but when it does it’s usually a deciding factor that will heavily influence where someone will buy a home.
If the numbers on the financial side of things are difficult to satisfy in a particular area and the buyer might not be able to afford their desired home there are ways to get creative. Perhaps another area and a house with a secondary suite is an option that satisfies both parties? It very much depends on the situation, but my goal is always to be proactive in finding solutions.
5. The Buyer with no Geographical Criteria
In some situations I work with buyers who like the idea of owning their own place, but don’t really have a specific area or any real criteria for where they want to live. It’s hard to show people homes all over the city, so generally my approach in this situation is to take them on mini tours of specific neighbourhoods in the hope that they’ll naturally narrow things down by finding places they connect with.
I’ll show them all the local amenities like the local elementary school, grocery store, gym and coffee shop, and any other points of interest, and the hope is that the person with no criteria will begin to clarify what they like and dislike about various locations, and we can begin to focus on certain neighbourhoods.
There’s always some underlying factor that they might not have considered that will eventually expose itself during this “reconnaissance” stage.
Maybe they travel for work from time to time and being close to the airport is important?
Maybe they work out at Goodlife and want to be close to one of their gym locations?
Maybe they really like craft beer and would enjoy being close to a microbrewery?
There’s always something that will set one neighbourhood apart from the rest of the city, and the key is knowing what questions to ask to create a situation where that information can come out.