We have been glad to hear from so many of you that you are able to stay home and safe during this period of uncertainty that we are all dealing with. It would have been hard to imagine, just a short couple of months ago, how resilient we could all be. This community has proven to be flexible, adaptable, creative, and productive in ways that are very impressive!
We all sincerely appreciate the front-line workers: health care, retail, cleaning staff, food production workers, and others who continue to do their jobs to maintain order and the basic function of society within the new limitations. And we can’t miss this opportunity to give a shout out to all the landlords who have offered financial relief to their tenants who have been put out of work or, worse, into quarantine due to sickness. Human compassion is a quality that is sorely needed – and good tenants certainly deserve consideration from real estate investors at a time like this.
REALTORS – Essential…Why?
Having acknowledged what is truly important, and accepted that our priorities must revolve around people and health before money and material things, we also realize that it’s not unreasonable to wonder how the pandemic is affecting your real estate investments – whatever sector of the market you own or hope to own.
This year started with a bang, and was off to an early start that rivalled the strong seller’s market of 2017. Buyers were struggling with bidding wars, and prices were rising quickly as demand was continuing to grow.
COVID-19 seemed to sneak up on us overnight…or at least the realization that we would have to universally enact some very extreme measures did. At the beginning of March, most of us were carrying on our daily lives, business as usual. Then, suddenly, we couldn’t. This has caused disruptions in every household and every workplace.
As realtors, we were grateful to be classified as Essential Service Providers, but not because any of us intended to carry on as though nothing had changed. We have clients who were in the middle of transactions, and who have binding legal contracts to honour. There are people who have a genuine need to buy or sell due to job transfers, family obligations, health issues, deaths, divorces, and any number of other personal circumstances. We are sincerely relieved to be able to provide them with the guidance they need through this process, especially now, in such unusual times.
GETTING DOWN TO BRASS TACKS – What’s Happening in Real Estate Right Now?
To answer the question we hear most often: Showings are down over the past six weeks, most definitely. This is good news, because it means that people in the community as a whole are taking the restrictions seriously enough to avoid booking unnecessary showings. The market is still functioning, though, thanks to our ability to leverage technology to serve our buyer and seller clients.
Social distancing requirements have had the effect of supercharging the move toward online marketing and presentation of properties via high-quality photography, virtual showings, and 3D tours that was already happening in the real estate industry.
Professional real estate photographers have adopted intense hygiene protocols to ensure that they enter homes safely. Masks, gloves, sanitizer, and low-to-no-touch policies have become the norm. Sellers are required to turn all lights on, open all doors, and move any items that are not to be photographed, since the camera is the only thing the photographer will touch during their session.
Buyers are being asked to do virtual walk throughs of any real estate they are considering, and to ask all their questions before attending a showing. Of course, open houses are not being held, but our marketing portals and platforms have been modified to allow virtual open houses and Zoom-style virtual showings with a realtor.
When there is sufficient interest to justify an in-person visit, attendees (including the agent) are carefully and thoroughly screened for risk factors that would disqualify them from being allowed access to a property.*
Once an offer is made and accepted, home inspectors, who are considered essential, can attend and do full inspections after being properly screened.
One gets the sense that anyone who is currently exploring the market for a residential property is a serious buyer or seller. This is not the time for tire kicking or hobby shopping – and everyone is being respectful of the limits.
*Many tenanted properties, though they can be bought and sold, cannot be viewed in person, since the safety of the tenants is paramount and trumps the needs or wishes of a seller or buyer.
Financing and Mortgage Rates
Mortgage rates have been incredibly affordable for years now. This absolutely contributed to the increase in property values over the past decade, since it made the cost of borrowing toward a real estate purchase affordable for the largest number of people. (For perspective on just how low current rates are, check out this Globe and Mail article with a graph comparing rates from the 1980’s!)
Whether the rate-cuts that we are seeing now will encourage buyers to pull the trigger on a real estate purchase in the midst of these unprecedented circumstances is yet to be seen.
If you own property and have accessible equity, this may be a good time for you to consider refinancing to pull out cash that you require for immediate needs.
What About the Value of My House?
While we would love to peek into the future to tell you what it holds for the values of your real estate investments, the truth is that no one really knows how this will turn out in the short term. The situation is unprecedented, and we are all learning as we go. Anyone who claims to have inside information and a reliable prediction is only guessing.
If you have owned your house for some years, you likely have earned enough equity over time to weather this storm and still come out ahead.
If you bought real estate recently, and you are struggling to make payments, please look into the provisions that are being made to reduce the stress and financial strain on Canadians by the government and financial institutions.
Real estate is an investment, and just like any other, it does involve a measure of risk – though that risk is historically very low over the long term. Any losses in value right now are only paper losses unless you have an immediate need to sell. If you close your eyes and picture a line graph that shows the trend line over the time you own property, the general direction is up – but we are currently in one of the little jagged downward protrusions on the line. Hold steady if you can, and wait till the line heads back up in the right direction while you enjoy your home.
We are definitely living history, a turbulent time that we will talk about for a long time to come. Hopefully, we will learn from this and come out wiser and more focused on the things (and people) that really matter to us.
Real estate, like so many other things in life, involves a series of ups and downs. But we will recover.
Please take care of your health, first and foremost. And feel free to reach out if you’d like to discuss anything real estate related with us! We are always available.