Pandemic Impact on Real Estate Market

By: Sylvia Smith

Pandemic Impact on Real Estate Market

Tags: Pandemic, REAL ESTATE MARKET, SELLING YOUR HOME, BUYING A HOME, LISTING A HOME, TORONTO MARKET UPDATE, HOUSE HUNTING, HOMES FOR SALE, TORONTO REAL ESTATE, VAUGHAN REAL ESTATE, VAUGHAN HOMES

The Greater Toronto Area real estate market was unbelievably hot until about March 15th. Since the end of 2019 until mid-March, we were seeing a huge spike in real estate demand with very low supply which resulted in many bidding wars in the GTA.

 

As we grapple with the economic uncertainty that the COVID-19 is having on our economy and the housing market we are seeing a dramatic slowdown in the real estate market.

 

Recently the Ontario government identified the real estate industry as an essential service. Land registration services, real estate agent services, lawyers, inspectors, movers, financial institutions are able to keep providing services. But let’s be clear it is not business as usual. The objective of allowing these services is to continue is to ensure no one ends up homeless. So for transactions underway we want to ensure that people don’t end up being homeless during these unprecedented times.

 

What we are seeing is that some homes are still selling in bidding wars but buyers are not waiving financing and often inspection conditions. Bidding wars are also not as aggressive as they were just two weeks ago. We have also seen a reduction in the number of new listings coming on the market. Realtors are also being discouraged to participate in face to face interactions to reduce the spread of the coronavirus. I have personally made the decision for the safety of sellers, buyers, and their families to stop showing homes until things settle down.

 

As a result, the real estate market has dramatically slowed down in the last two weeks. We are starting to see listings being canceled if sellers do not need to move and are in a position to wait. In other cases, such as divorces, or if someone sold and now needs to find a new home, estate sales new listings continue to come on the market – because of life situations some people will still have to buy and sell.

 

We are obviously living in very uncertain times and things are changing very quickly. My prediction is that if we can get the coronavirus under control quickly by staying home and practicing social isolation distancing and hence flatten the curve and stop the spread of the coronavirus the real estate market will bounce back relatively quickly.

 

However, if the quarantine goes on for 4 – 6 months the impact will be much more severe and we could possibly see a longer-term impact on the real estate market and hence price reductions. Will we see long term impacts – I do not think so as there is a real shortage of housing in the Greater Toronto Area – rents are expensive and many individuals have been waiting on the sidelines for a number of years hoping for a housing market crash after the introduction of the mortgage stress tests. There are many buyers eager to get into the market or make the move up to their next home.

 

Stay Safe, Stay Positive, Practice Social Distancing, and most importantly Stay Healthy. This too will pass.