Real estate agents in the Sarnia area are still working, but it’s not business as usual.
Within two weeks, the world has changed dramatically. We’re now in the face of massive closures and shutdowns, cancelled sports seasons, stock market declines and fistfights in the aisles of Costco over toilet paper. COVID-19, or the Coronavirus, has impacted everyone internationally in one way or another. But does the trickle-down of this global virus eventually impact the Guelph housing market?
Yes, it does.
But exactly how, is anyone’s guess.
There are several scenarios that could play out in the Guelph real estate market in the coming weeks and months. With Coronavirus panic and uncertainty in the market, both buyers and sellers need to wade through facts and figures to determine whether now is a good time to buy or sell.
In March alone, the Big Five banks have made a 1 per cent cut in the prime rate, which is the key benchmark that underpins variable-rate mortgages and lines of credit. The Office of the Superintendent of Financial Institutions, the federal banking regulator, also had plans to recalculate and reduce the qualifying rate on mortgages but has now put this plan on hold.
It could get more aggressive in the market
There’s no question that the Southern Ontario real estate market is in short supply of homes for sale. The Toronto Real Estate Board (TREB) reports that the average price of a home has increased by almost 17 per cent or $130,000 in February alone.
In January, 60 per cent of homes sold at or above the listing price in Guelph. In February, that number increased to 63 per cent. As of March 13, 68 per cent have sold at or above the list price this month.
It’s equally hot in Guelph.
Sellers are taking the record-high sales prices from the GTA and putting their money to work in Guelph where real estate is relatively cheaper. At the same time, there are fewer sellers putting their homes on the market in Guelph for a variety of reasons.
But what if those sellers decide it’s not urgent to sell and decide to wait until the Coronavirus is behind us? Fewer homes on the market with the same number of buyers could cause an even worse housing frenzy.
Local realtors, Beth and Ryan Waller predict that the higher-end home segment in Guelph of $750,000-plus will gain market share from the other segments. In February alone, this segment represented 17 per cent of home sales versus 11 per cent in February 2019. Homebuyers in this segment that are considering selling this year may want to do so during the spring rush.
Or, the market may be flooded with supply and there are fewer buyers
An alternative scenario could be that sellers believe we are in for a recession and race to get their houses on the market in anticipation of falling prices. After all, the Guelph market has had quite a run and it’s always good to sell at the high.
At the same time, buyers may be deciding that going out in public for open houses and viewings could expose them to the Coronavirus and may decide to put their home search on hold for a few weeks. If there ends up being an increased supply and less demand, prices will rapidly decline and the competitiveness of today’s market will take a breather making it easier for buyers to get into their dream home.
If there ends up being an increased supply and less demand, prices will rapidly decline and the competitiveness of today’s market will take a breather making it easier for buyers to get into their dream home.
Or it may be business as usual
It’s quite likely that we’ll see a combination of both of these scenarios as we move into the spring market – the traditional strong period for buying and selling homes. There will be increased sellers and continued demand from out of town and local buyers. And as a result, the market will probably tread along at a more balanced, more reasonable pace than we’ve seen in the past few months.
One of the most important things to consider is the guidance of a local REALTOR® who follows the market closely. If you’re selling, a marketing plan is necessary to maximize your sale price in today’s market. If you’re buying, you should have insight into neighbourhood trends, potential buying strategies and strong negotiators working for you.
This Content is made possible by our Sponsor; it is not written by and does not necessarily reflect the views of the editorial staff.
Canadian real estate markets hit hard by pandemic – CBC.ca
Vancouver real estate agent David Hutchinson pulls out some bright blue medical gloves and tugs them onto his hands before entering a condo that’s coming onto the market.
“It’s uncharted territory, a completely different ballgame, and we’re learning everything on the go,” he said as he got his cellphone ready to do a virtual showing from the empty unit.
Welcome to selling real estate during a pandemic.
While Hutchison continues to work, albeit with adjustments, Canada’s real estate industry appears to be heading into a deep freeze despite the warming spring weather. Though sales figures started off relatively strong in March in many parts of the country, they fell swiftly as the COVID-19 pandemic grew and stricter protective measures were put in place.
Greater Vancouver’s real estate board, for example, released figures showing sales for the month overall were up 46 per cent compared to last March.
But by the end of the month, weekly statistics showed a dramatic slowdown, falling by about half compared to the first part of the month.
It was the same in Toronto, where home sales were up 49 per cent in the first 14 days of March compared to last year, but they plummeted by 16 per cent as the month closed.
Hutchison thinks April “is just going to fall off a cliff.”
Toronto chartered accountant and real estate agent Scott Ingram agrees. He expects April sales to be “far below historical averages.”
“Not in my time watching the Toronto real estate market have I seen sales slow right down as quickly as this,” he wrote in an email exchange. “Not even back in April 2017, when the Ontario government brought in its Ontario Fair Housing Plan with the 15 per cent non-resident speculation tax,” among other measures.
Lower prices predicted
Hutchison is worried values will fall along with the number of transactions.
“We don’t know where prices are going to go. I mean, why would you buy something now if you perceive prices are going to go down in the future, which may very well be.”
An April 3 report by RBC predicts housing sales could fall to a 20-year low, dropping 30 per cent over the coming year, and prices will indeed go down, in the short term at least.
With millions of people suddenly turning to financial aid from the government, personal finances that looked healthy a few months ago are suddenly shrouded in doubt.
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“In a matter of weeks or months, surging unemployment and the market’s illiquidity will compel a growing number of tight-squeezed sellers to make price concessions,” wrote RBC’s Robert Hogue.
Legal headaches for buyers and landlords
Across Canada about 65,000 homes traded hands in the first two months of the year, and many of those sales are now closing in a completely different environment than when the deals were made.
Vancouver real estate lawyer Ken Pazder is already seeing the fallout.
He says some clients are wondering if they have to close on deals made before the pandemic.
He has to tell them that, under the law, a deal is still a deal.
“You’re not going to be able to say ‘I don’t want to close because I’ve just lost my job, I don’t want to close because my company is shutting down or I have to shut down my business.’ That’s not going to be a legal excuse that would fly in the courts.”
In addition, his landlord clients are facing other legal issues, including tenants who suddenly aren’t paying rent.
Further complicating the situation is so-called vacant possession — a legal obligation to ensure that a sold property is in a state fit to be occupied, which can include requiring tenants to vacate when the new owner takes possession.
A moratorium on evictions in B.C. means those provisions can’t be enforced in all situations, leaving some new owners unable to access homes they have purchased.
Alberta hit by double whammy
Alberta markets could be facing the strongest head winds.
On top of the pandemic, the province has been slammed by additional layoffs caused by dramatically lower oil prices.
Calgary real estate agent Alicia Ryan says there are always some people in circumstances that force them to buy or sell, but others should consider waiting.
“Not everybody needs to sell right now, and if you don’t need to sell, we’re telling our clients hold off until things settle down a bit.”
RBC’s Hogue says Calgary is in a tough spot. “We believe property values are at risk of a more sizable decline.
The bright spot in all of this appears to be a long way off, with Hogue predicting an eventual rebound that will come in “stages,” fuelled by low interest rates and pent-up demand from buyers currently on the sidelines.
“The timing and speed of the recovery is uncertain at this point.”
In the meantime, agents are still showing properties, but any potential buyers who want to look will likely have to sign a waiver acknowledging they may be exposing themselves to COVID-19 and accept risks that include illness and death.
Windsor-Essex real estate surviving COVID-19 measures – CTV News Windsor
WINDSOR, ONT. —
New real estate numbers in Windsor-Essex show COVID-19 has yet to take a big bite out of the region’s red-hot market.
Monthly statistics for March from the Windsor-Essex County Association of Realtors (WECAR) shows the average sale price is up 7.46 per cent year-over-year to $357,874 – but down roughly $30,000 from February.
Bidding wars and quick sales that have become the norm in the market continue despite the restrictive government measures put in place to limit the spread of COVID-19, including doing away with open houses and in-home showings.
“There are people that have bought houses and have sold houses and they got caught right in the middle of it, so, those people are still keeping our market active,” said Lorraine Clark, president of the WECAR.
Clark noted while market activity is up with more listings than this time last year, sales are down 9.44 per cent over the same period.
Uncertainty in the market and measures put in place to protect tenants during the pandemic have scared Toronto buyers off of Windsor-Essex, according to Clark.
“That’s not a bad thing for Windsorites, because Windsorites have been competing for the last few years with Toronto and Windsorites can’t compete with Toronto because they have a lot more money in their pocket,” said Clark.
The quickly rolled-out regulations caught some homebuyers and sellers in the crosshairs, creating stress – in particular – for those buyers planning to move into new builds and now facing the prospect of scrambling to find alternate accommodations as COVID-19 measures lead to construction delays.
The provincial government has maintained residential construction on its list of essential businesses.
Homebuilders in the region continue to finish out permitted projects to meet the housing demand, but no new permits will be issued until novel coronavirus-related restrictions are lifted.
“These people would be without shelter, without dwelling,” said Brent Klundert, co-owner of BK Cornerstone. “I think it was important that they kept us on the essential list.”
BK Cornerstone has revised its construction practices, limiting one trade per site to help maintain physical distancing.
Crews have been accommodating, now working weekends as well to help complete projects as close to on-time as possible, but according to Klundert, the measures are seeing work completed more slowly and more costly.
When new permits are available again, Klundert wants to see municipalities and his industry ready to roll.
“Especially, just out today about real estate not really slowing down due to the virus, there could be a major shortage of housing again in this area for a little while,” said Klundert.
According to Clark, the April statistics will give a better picture as to the impact COVID-19 measures have had on the Windsor-Essex housing market.
Clark is confident a return to normal within six to eight weeks could see the virus register as a blip in the market, instead of a crater.
“I think our year-end is probably going to be not as bad as everyone is thinking,” said Clark.
Real estate offices handling essential sales during outbreak – Sarnia Observer
Real estate agents in the Sarnia area are still working, but it’s not business as usual.
Donna Mathewson, president of the Sarnia-Lambton Real Estate Board, said she felt it was important to let the public know what the real estate industry has been asked to do during the restrictions imposed to slow the spread of COVID-19.
“We’re been deemed to be an essential service” to assist with “essential purchases or sales,” she said.
That designation came following consultations with the provincial real estate association and the legal community, Mathewson said.
She said examples of essential purchases and sales include court-ordered sales of houses due to separations or divorces, estate sales already in progress, sales related to job loss or transfers, foreclosure and bankruptcy, and finding new homes for buyers who had already sold their current house.
“There are certain things the government has asked us to help facilitate,” Mathewson said.
But because of the restrictions, open houses cannot be held while other ways the industry usually operates have changed.
“We’ve been deemed an essential service, but with limitations,” Mathewson said. “We have been asked to not have any in-person face-to-face contact” while dealing with essential sales, she said.
Luckily, realtors are “well positioned” to be able to use virtual and electronic tools to conduct business, Mathewson said.
“We can do a transaction safely and efficiently, all virtually.”
Mathewson said members of the board want to provide essential services while also protecting themselves and their own families during the outbreak.
“We want to make sure our clients are staying safe,” she added.
But, Mathewson said, “the government has told us it is not to be business as usual.”
The real estate board has approximately 240 members in the Sarnia area.
March sales numbers reported by the real estate board remained strong, with more than $50 million in total sales, up from the same month last year. The year-to-date sales volume was up 17 per cent so far in 2020, with a total of $131 million.
Mathewson said she wasn’t surprised March numbers remained strong, even with the start of COVID-19 restrictions.
“We would expect that impact to be seen more in April,” she said. “Houses were still moving, fairly well, right up until mid-March. That’s kind of when things started to go into lockdown mode.”
During the initial week of restrictions related to the outbreak, sales already underway were pushed along to get them completed, she said.
The Sarnia area has had a “seller’s market” with high demand and low supply of homes for the past three to four years, but Mathewson said she expects to see lower numbers in April because of COVID-19.
“We fully expect that once things can return to whatever a new normal is, we still see our market rebound and we’ll pick up where we left off,” she said.
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