COVID-19 Impact on Real Estate - April 6, 2020
Note: This is an update that I provided to my clients. Thought I would share it here as well.
During the first two weeks of March, interest rate reductions and low inventory of for-sale houses led to a brisk market. Sales during the second week of March were up over 50 percent compared to the same period in 2019. Multiple offers and bully bids were the norm.
After Premier Ford declared a state of emergency on March 17, the market changed. If they were able, most home sellers decided to postpone their sales until the situation stabilizes. However, some sellers - in situations such as divorce, estate sale, job transfer or those already under contract to buy a home - still needed to sell, so home sales continued.
The TRREB reported 8,012 home sales in the GTA in March 2020 - up by 12.3% compared to 7,132 sales in March 2019. The average selling price was $902,680 - up by 14.5% over March 2019.
The difference between the first two weeks of March and the last two weeks was marked. During the first two weeks, there were 4,643 sales - up by 49% compared to the same two weeks in March 2019. In the two weeks after the March 17 COVID-19 emergency announcement, there were 3,369 sales - down by 15.9% compared to the same period in March 2019.
TRREB President Michael Collins made these remarks: "Uncertainty surrounding the outbreak's impact on the broader economy and the onset of the necessary social distancing measures resulted in the decline in sales since March 15. Sales figures for April will give us a better sense as to the trajectory of the market while all levels of government take the required action to contain the spread of COVID-19."
While no one can predict with certainty, economists are calling for the housing market to rebound once the social distancing measures related to COVID-19 are lifted.
BMO economist Priscilla Thiagamoorthy is calling for a second half rebound: "Activity is set to slow markedly - likely both sales and listings - although much lower rates should help a second-half-revival."
RBC Senior Economist Robert Hogue agrees and is "penciling in" an early summer "restart." He also said, "Exceptionally low interest rates, strengthening job markets and bounce-back in in-migration will generate substantial tailwind. We project home resales to surge more than 40% to 491,000 units in 2021".
March 4 - Bank of Canada cuts interest rate during regular announcement
March 13 - Bank of Canada makes emergency interest rate cut
March 16 - Federal government asks people to work from home
March 17 - Ontario declares State of Emergency
March 21 - OREA calls to REALTORS® to stop holding open houses
March 23 - List of essential services includes real estate
March 24 - OREA calls to REALTORS® to stop face-to-face business including open houses, in-person showings and other meetings.
March 27 - Bank of Canada makes 2nd emergency interest rate cut
April 3 - Revised list of essential services. Real estate included but open houses are specifically prohibited
Selling a home during the COVID-19 pandemic does present some challenges for homeowners and REALTORS®. In order to both sell the home and protect the health of all those involved, most REALTORS® are taking some (if not all) of these precautions:
I blogged about this topic last week so please go to my blog for more detailed information: https://stephhebbrealestate.blogspot.com/2020/03/selling-home-during-covid-19-pandemic.html
I have to say, I was really proud of the way my company, Royal LePage, and my brokerage, Royal LePage Real Estate Services Ltd, Brokerage, responded to the pandemic. In each case we were ahead of the rest of the industry in taking steps to keep people safe. Our offices closed promptly on March 17. We were asked to stop holding open houses four days ahead of the OREA notice. On March 25 the company issued comprehensive guidance for how to conduct business as an essential service.
With so many people unable to work because of the stay-at-home-measures, the federal government has announced measures to help homeowners manage their finances.
That's it for now. Please let me know if you have any questions or feedback for me at Stephanie.hebb@royallepage.ca.
Stay home and stay healthy.
Steph
More reading:
https://stephhebbrealestate.blogspot.com/2020/03/selling-home-during-covid-19-pandemic.html
https://trnto.com/toronto-real-estate-market-down/?fbclid=IwAR1kFciEQIgVf2KpOyhFt091Hc5SHvStDFaNTZUsOLlgfkMRnwvyG_Bf0HI
https://www.livabl.com/2020/04/toronto-home-sales-fell-march-covid19-pandemic.html?fbclid=IwAR0j1uML3lJIUhKrLmYDLYaVgNWN3MZVr1-3fnzKAM9fUB1zZuvP5mRkuOY
https://www.livabl.com/2020/04/canadian-housing-market-recovery-summer.html?fbclid=IwAR2JTOijwJbYXhHP4i1jnwltK6qitetjzC6VeUp5RjPSIt5isMRk-WwtPB4
https://www.theglobeandmail.com/real-estate/toronto/article-stillness-descends-on-toronto-area-real-estate/?fbclid=IwAR3bTXo3ZQzs08wE-jLqMyaCCWPxPIjYUn97zeDVhrRWBdftm3ZCA4RC_20
https://www.livabl.com/2020/03/historically-low-mortgage-rates-housing-recovery.html?fbclid=IwAR0L77uGkR8t1fVgTt2JFU2KHdRzErcKY03UvVkeg_KLqcykYeqwjwYTeQY
Real Estate Market Overview
During the first two weeks of March, interest rate reductions and low inventory of for-sale houses led to a brisk market. Sales during the second week of March were up over 50 percent compared to the same period in 2019. Multiple offers and bully bids were the norm.
After Premier Ford declared a state of emergency on March 17, the market changed. If they were able, most home sellers decided to postpone their sales until the situation stabilizes. However, some sellers - in situations such as divorce, estate sale, job transfer or those already under contract to buy a home - still needed to sell, so home sales continued.
The TRREB reported 8,012 home sales in the GTA in March 2020 - up by 12.3% compared to 7,132 sales in March 2019. The average selling price was $902,680 - up by 14.5% over March 2019.
The difference between the first two weeks of March and the last two weeks was marked. During the first two weeks, there were 4,643 sales - up by 49% compared to the same two weeks in March 2019. In the two weeks after the March 17 COVID-19 emergency announcement, there were 3,369 sales - down by 15.9% compared to the same period in March 2019.
TRREB President Michael Collins made these remarks: "Uncertainty surrounding the outbreak's impact on the broader economy and the onset of the necessary social distancing measures resulted in the decline in sales since March 15. Sales figures for April will give us a better sense as to the trajectory of the market while all levels of government take the required action to contain the spread of COVID-19."
Real Estate Market Outlook
While no one can predict with certainty, economists are calling for the housing market to rebound once the social distancing measures related to COVID-19 are lifted.
BMO economist Priscilla Thiagamoorthy is calling for a second half rebound: "Activity is set to slow markedly - likely both sales and listings - although much lower rates should help a second-half-revival."
RBC Senior Economist Robert Hogue agrees and is "penciling in" an early summer "restart." He also said, "Exceptionally low interest rates, strengthening job markets and bounce-back in in-migration will generate substantial tailwind. We project home resales to surge more than 40% to 491,000 units in 2021".
COVID-19 Timeline
March 4 - Bank of Canada cuts interest rate during regular announcement
March 13 - Bank of Canada makes emergency interest rate cut
March 16 - Federal government asks people to work from home
March 17 - Ontario declares State of Emergency
March 21 - OREA calls to REALTORS® to stop holding open houses
March 23 - List of essential services includes real estate
March 24 - OREA calls to REALTORS® to stop face-to-face business including open houses, in-person showings and other meetings.
March 27 - Bank of Canada makes 2nd emergency interest rate cut
April 3 - Revised list of essential services. Real estate included but open houses are specifically prohibited
Selling a Home During COVID-19
Selling a home during the COVID-19 pandemic does present some challenges for homeowners and REALTORS®. In order to both sell the home and protect the health of all those involved, most REALTORS® are taking some (if not all) of these precautions:
- Using the phone or teleconferencing technologies, such as ZOOM, to hold meetings with sellers.
- Using electronic documents and signatures for paperwork
- Using virtual tours and live open houses (Facebook Live) to show properties remotely.
- Limiting showings to very serious buyers who've either put in an offer or plan to and who've exhausted all virtual means of viewing the property.
- Having buyers and their agents sign COVID-19 declarations saying they are not ill, have not traveled or been exposed to someone sick with the virus.
- Abiding by all public health recommendations for cleaning and disinfecting properties prior to anyone entering and after they leave.
- Adding COVID-19 Clauses to Agreements of Purchase and Sale to cover any potential delays in closing as a result of the pandemic
I blogged about this topic last week so please go to my blog for more detailed information: https://stephhebbrealestate.blogspot.com/2020/03/selling-home-during-covid-19-pandemic.html
I have to say, I was really proud of the way my company, Royal LePage, and my brokerage, Royal LePage Real Estate Services Ltd, Brokerage, responded to the pandemic. In each case we were ahead of the rest of the industry in taking steps to keep people safe. Our offices closed promptly on March 17. We were asked to stop holding open houses four days ahead of the OREA notice. On March 25 the company issued comprehensive guidance for how to conduct business as an essential service.
Help for Homeowners
With so many people unable to work because of the stay-at-home-measures, the federal government has announced measures to help homeowners manage their finances.
- Canada Emergency Wage Subsidy, a 75% wage subsidy for businesses, non-profit organizations and charities designed to help them keep employees on the payroll.
- Deferred GST/HST remittances
- Deferred income tax remittance
- Working with financial institutions on relief for mortgages
- Canada Emergency Business Account providing interest-free loans to small businesses and non-profit organizations to help with operating costs.
- Lending support for small businesses through Export Development Canada and the Business Development Bank of Canada.
- Canadian Emergency Response Benefit for those who have lost income, including some workers who don?t normally qualify for EI benefits.
That's it for now. Please let me know if you have any questions or feedback for me at Stephanie.hebb@royallepage.ca.
Stay home and stay healthy.
Steph
More reading:
https://stephhebbrealestate.blogspot.com/2020/03/selling-home-during-covid-19-pandemic.html
https://trnto.com/toronto-real-estate-market-down/?fbclid=IwAR1kFciEQIgVf2KpOyhFt091Hc5SHvStDFaNTZUsOLlgfkMRnwvyG_Bf0HI
https://www.livabl.com/2020/04/toronto-home-sales-fell-march-covid19-pandemic.html?fbclid=IwAR0j1uML3lJIUhKrLmYDLYaVgNWN3MZVr1-3fnzKAM9fUB1zZuvP5mRkuOY
https://www.livabl.com/2020/04/canadian-housing-market-recovery-summer.html?fbclid=IwAR2JTOijwJbYXhHP4i1jnwltK6qitetjzC6VeUp5RjPSIt5isMRk-WwtPB4
https://www.theglobeandmail.com/real-estate/toronto/article-stillness-descends-on-toronto-area-real-estate/?fbclid=IwAR3bTXo3ZQzs08wE-jLqMyaCCWPxPIjYUn97zeDVhrRWBdftm3ZCA4RC_20
https://www.livabl.com/2020/03/historically-low-mortgage-rates-housing-recovery.html?fbclid=IwAR0L77uGkR8t1fVgTt2JFU2KHdRzErcKY03UvVkeg_KLqcykYeqwjwYTeQY
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