Although COVID-19 measures will surely catch up to the local real estate market, realtors on the ground are reporting brisk movement at the moment including numerous multiple-offer bidding wars and bully offers as recent as yesterday.
“Sales remain strong despite the dramatic changes over the past seven days,” said John Pasalis, president of Realosophy Realty. “Sales during the second week of March were up over 50 per cent compared to the previous year.”
Inventories of homes for sale are currently still at very low levels, and interest rates continue to drop. The bank rate sits at just one per cent. The conditions would generally suggest a robust sellers’ market, but these are extraordinary circumstances that change by the hour and most predictions moving forward are for a significant economic contraction.
Pasalis said the decision to buy in times like these is a very personal one. But there are some basic principles to help inform the decision.
“If you are concerned that your company and/or job may be impacted by a potential slowdown in the economy then it may be more prudent to hit pause until you are more confident about your employment situation in the future,” he said. “For buyers with stable incomes and down payments, don’t get caught up in bidding wars by overpaying. Look for value.”
Jamie Dempster, the broker at RE/MAX Hallmark Jamie Dempster Group, confirms that, although it might change quickly, there are still plenty of buyers and sellers participating in the spring market.
“We are seeing historic rate cuts, and the real estate market seems to be moving along despite the state of emergency and shut down of many parts of society,” he said. “It seems buyers are still active and not deterred. I’ve been tracking the market closely, and last night alone in the east end, central, north Toronto and west end, we saw multiple offers and sales over asking price. Some homes sold with multiple bully offers.”
Dempster said he still has three homes coming to market in the next week or two.
“I have conducted three listing meetings with sellers via Facetime or conference call. We are delivering COVID 19 kits to all our listings whether active or coming to market (items in the “kits” consist of Lysol wipes, hand soap, and paper towel). We are instructing all agents who show our properties to first wash their hands, if not feeling well to cancel and reschedule, limit showings to one group per visit, no double showings.”
For those considering putting their home up for sale in the near term, Pasalis said it depends on the segment of the market.
“For the types of homes and condos that are selling quickly, in under a week, it’s still a seller’s market,” he said. “But if you have the type of home that might take slightly longer there may be some value in waiting until much of the uncertainty in the markets is behind us.”
What the market will look like in six months or a year from now, is much tougher to predict.
“It’s difficult because much of that has to do with how our economy adjusts
to this shock,” said Pasalis. “If businesses remain closed for two to four weeks and the virus remains under control then the fallout will be minimal and the housing market will likely remain strong through the rest of 2020. But if we see businesses closed for an extended period of time and/or the virus accelerates, then it’s difficult to predict the impact that might have on our economy, jobs, and the housing market.”