By rights, Ottawa’s real estate industry should be flat on its back. It’s a sector that relies heavily on buyers with secure jobs, direct personal contact and confidence in the future.
Yet, despite all the pernicious effects of social distancing, including lost jobs, shrinking wages and disappearing revenues in core parts of the economy, the past week has been anything but quiet.
“In the last seven days, we’ve seen 576 new listings, 119 of them in the past 24 hours,” says Bill Meyer, owner of HomeTeamOttawa, a real estate firm that markets services under the Remax Hallmark Realty banner. “We are still in this period of pent up demand.”
Indeed, the COVID-19 virus smacked into Ottawa’s real estate industry just as it was scaling rarely seen peaks. Residential resale prices had soared 20 per cent year over year in January and February, the highest such gains in nearly four decades. Residential properties last month sold for a record average $564,000, while condos fetched nearly $350,000.
Even so, momentum will carry the sector only so far. A reckoning is coming and there’s a whiff of desperation in the air.
“We aren’t doing open houses anymore,” Meyer says, “but this market is strong because some people still have to sell. They’re changing jobs or they’ve already bought a house and need to sell to pay for it.”
It could be a much different picture once all these urgent sales clear the market. “This could all come to a screeching halt,” Meyers observes. “I can’t imagine people listing their homes in this (COVID-19) environment unless they have to.”
Certainly working conditions have changed. The firm’s 15 agents and staff are working out of their homes. Meyers goes to the office for a couple of hours each morning and evening, when he is the only one there, and catches up with colleagues by phone or email.
Like many other real estate firms, Meyer’s company has stringent protocols in place. Agents still arrange showings, but there can be no overlap of potential buyers. Hand sanitizers or wipes must be available, and all inside doors must be kept open so no one has to touch surfaces.
Meyer on Tuesday arranged an estate sale in which all papers were signed electronically.
It’s a similar scene at Paul Rushforth Real Estate, an agency with 13 realtors. “We’ve closed our offices, but our front desk is still taking queries from home,” Rushforth says. “We’re not doing open houses, and showings (of houses) are just one person at a time.”
Rushforth says he has been surprised by the briskness of sales activity this past week, but can see underlying weakness. As with Meyer, many of his company’s new listings are from people who absolutely need the cash after buying another house earlier and fully expecting to pay for it by selling their existing home into a hot market.
So far prices are holding up, but Rushforth notes some telling patterns. “We’re still seeing bidding wars for properties,” he says, “including more than half our ten most recent deals.” But he notes that a property that might have attracted 10 bids early in March now gets just two or three. This, in turn, means sellers are not getting as much over their initial asking price. “This week we listed a property for $699,000 and it sold for $708,000,” Rushforth explains, “Two weeks ago, it would have got $770,000.”
John King, the broker manager for Engel & Völkers Ottawa Central, says he also notices the start of a shift. On Thursday evening, he fielded six offers for a property at 480 Brennan Ave., in the Hampton Park district. It sold almost immediately for $747,000, more than $100,000 over the original listing price.
On Friday, though, he was somewhat surprised to discover there were still no requests for showings for two new listings in the highly popular district of Westboro. “It’s day by day now,” King says.
For the moment, Engel & Völkers is keeping its Ottawa offices open with a skeleton staff. “There’s just one employee per floor,” King says, adding he is also making greater use of video by doing tours of his listings through Facebook. If people like what they see virtually, they can sign up for a showing in person, “one group at a time.”
The difference between what was and what will be in Ottawa’s real estate market promises to be stark.
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Copyright Postmedia Network Inc., 2020
Real estate pause could hit city budget hard – Toronto Sun
With the ongoing coronavirus outbreak hitting the pause button on Toronto real estate sales, there is concern the crisis may deal a serious blow to the city’s bottom line.
Approved earlier this year, Toronto’s $13.6-billion 2020 budget includes an expected $800 million in revenue from the Municipal Land Transfer Tax (MLTT) — accounting for 7% of the city’s operating funding.
The budget already included a $77-million hole expected to be filled by federal funding commitments to pay for the housing of refugees — commitments made long before coronavirus made worldwide headlines and paralyzed economies across the globe.
Relying on MLTT can be a risky venture for cities — in 2018 lower-than-expected real estate numbers produced a $84.5 million hole in the city’s budget, according to briefing notes.
With land sales in the city frozen due to COVID-19, MLTT revenue is expected to fall to levels far below that.
While requests to the city for year-to-date MLTT revenue numbers went unreturned, a statement from the Mayor’s office said the impact of the outbreak on city coffers won’t be known for some time.
“Mayor Tory and City of Toronto staff are working to make sure we do everything possible as a municipal government to help Toronto residents and businesses during the COVID-19 pandemic and after the crisis is over,” read an emailed statement.
“We know there will be an economic and financial impact on the City itself and our finance officials are working right now to understand how big that impact will be over the coming months.”
The TTC alone, said the statement, is losing about $20-million per week in revenue — one of many financial hits the emergency is dealing upon Toronto.
The TTC alone is losing revenue in the amount of roughly $20 million a week and that is just one of the financial hits the City is experiencing as a result of the ongoing emergency.
“Right now, our focus is on stopping the spread of COVID-19 while continuing to deliver essential and critical services and working with the other governments to rebuild the economy as quickly as possible.”
Video: Homeless man hosed down in front of Gastown commercial real estate office – Straight.com
Some Vancouver residents have expressed outrage over social media in connection with how a homeless person was treated in Gastown.
Video on social media shows a person spraying a garden hose to remove the man from the front door of 305 Gore Street.
The real estate office is part of an 11-storey mixed-use condo complex called The Edge, which was developed in 1999 at 289 Alexander Street.
One of those who tweeted about the incident was Harsha Walia, executive director of the B.C. Civil Liberties Association.
She described the use of the hose as “despicable anti-homeless violence”.
(Warning: the video includes swearing.)
It’s increasingly difficult for the homeless to find a place to rest in Vancouver as a result of the closure of libraries and most community centres, as well as the conversion of fast-food outlets and other restaurants to takeout joints.
For more on that, check out the tweets below by homeless resident and Straight contributor Stanley Q. Woodvine.
Real estate publisher lets 70 go, blames coronavirus impact – Toronto Star
Key Media, the Toronto-based publisher of trade magazines Canadian Mortgage Professional and Canadian Real Estate Wealth, has cut more than a third of its global workforce amidst the economic fallout from the COVID-19 pandemic.
This week, the publishing and conference company issued severance notices to 70 people, in offices as widespread as Canada, the U.S., U.K., Singapore and Australia.
Before the wave of cuts, the company employed almost 200 people in eight offices
One employee who received a severance notice said they’d been told by a Key executive that the biggest reason for the cuts was that the company’s conference business had dried up almost all at once, because of the global COVID-19 pandemic.
“The current economic climate has had a huge effect on the company’s revenues, and we have forecast a significant negative impact on the company’s bottom line for 2020. This means that unfortunately, we are no longer able to continue your employment,” the severance notice stated.
Email and Skype messages to company CEO Mike Shipley, who lives in Antigua, weren’t immediately returned.
Key Media publishes 130 trade magazines devoted to real estate, mortgages and insurance. It also runs 70 annual conferences and trade shows.
Earlier this week, Saltwire Media, Atlantic Canada’s largest newspaper chain, laid of 40 per cent of its staff and shut down all of its weekly papers for at least 12 weeks, citing a plunge in advertising in the wake of the COVID-19 pandemic.
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