After years of working in the real estate industry, I can honestly say that there has never been a time where this much uncertainty reigned. It’s hard to predict the next month, let alone what might happen in the upcoming year. We have taken to assessing the real estate market daily and predicting out only the next week during these crazy times. With that in mind, here’s what is happening right now and how we think this will affect the near future.
“Despite a global pandemic, house prices in the notoriously durable residential real estate market have climbed upward for the past few months, much to the disbelief of some industry insiders.” (TorontoLife.com)
The Real Estate Market Is Healthy (today)
At the beginning of the quarantine, we saw a downturn in inventory. It seems fewer people were willing to make a move than during the same period in 2019. While we saw a small boost over the summer months, we still have seen fewer new listings than normal over the summer. The flip side of this? Buyers are snapping up the homes that are listed at record rates.
Our prediction for the next month? More of the same.
If you are interested in selling, now could be a great time. Finding your next home might take more patience, but many families are looking at the suburbs for more space, so there may be more inventory downtown or new homes in the suburbs readily available.
“Meanwhile, Canada’s six biggest lenders, including Royal Bank of Canada, Bank of Montreal and Toronto-Dominion Bank, said they would consider six-month mortgage-payment deferrals for small businesses and individual borrowers impacted by the pandemic.” (Bloomberg)
Our prediction for the next year? The government subsidies for businesses and individuals have helped those laid off or furloughed due to COVID-19. Unfortunately, we are expecting the relief to end, and many families may list their homes to find rentals or smaller properties. If you are interested in real estate investment, now is the time to get in touch so that you can be ready to snap up properties if there is an economic downturn. Don’t feel too callous - by spending money on real estate, you are boosting the economy, which will lead to jobs and, in turn, helps those in need get back to work.
Bully Bids/ Bully Offers
A bully offer is an offer made before the official listing date of the home. This is a great system for sellers to collect offers and compare them before listing the home. Not so great for buyers as it is a system that lends itself to less inventory on the market.
Many Ontario realty agencies have called for these offers to be outlawed as an unfair practice, but they continue for now.
To avoid being negatively impacted by bully offers (as a buyer or seller), contact us today. We have the connections that allow us to see homes coming on the market before they’re listed. Those same connections can help us spread the word when we are getting ready to list a property. After all, if you can’t join ‘em, you don’t want to get beaten by ‘em!
Fewer Immigrants = Fewer Sales
“Twenty-one percent of homes in Canada are purchased by immigrants. That's about one-fifth of the housing market. Newcomers to the country spend approximately three years in Canada before buying homes, with 75% arriving to Canada with funds allocated for the purchase of a home.“ (Forbes)
Unlike our neighbours to the south, Canada has always been open to immigrants, and we have significantly benefitted financially from our welcoming attitude. Unfortunately, COVID-19 has slowed the wave of immigration (it’s down by a shocking 64% this year), and we will see the effects for several years, regardless of whether the country opens up tomorrow or stays closed for months. That being said, the market has not shown any signs of distress from immigrants’ loss yet. If anything, we have seen a boost in immigrants purchasing homes prior to their normal three-year waiting period, which we believe may result from wishing to create a sanctuary during COVID-19.
Overall, the market today is healthy. Mortgage companies seem to be asking for more documentation than normal, and the normal closing period has extended. If you are interested in buying, be sure to allow extra time for your mortgage to close than normal. If you are interested in selling, get in touch now while the industry remains a seller’s market!