COVID 19 is a worldwide public health threat that is now a pandemic. As we attempt to get used to the new reality of these uncharted waters our new modus operandi is to stay safe. Toronto has pretty much shut down as we collectively aim to “flatten the curve” and prevent further spread. Our borders are now closed as are bars, restaurants and businesses. As we learn to work from home and self-isolate with just reason we can’t help but be concerned about the financial ramifications of this crisis.
Toronto prices have been escalating dramatically since January due to a combination of low supply and sky-high demand. Sales in February were up by 46% from the prior year and prices were up by 17% for all home types. This trend has definitely continued through the first 2 weeks of March and even now in the third week of March quality homes are being snapped up quickly and are selling for well above the list price.
To cushion the economic blow caused by COVID19 the Bank of Canada has made two unexpected rate cuts. Currently at .75% there will likely be another rate cut on April 15th. These rate cuts are meant to encourage people to continue to borrow, spend and invest.
With the volatility in the stock market investing in real estate is seen as a safe haven. Many don’t realize that in the aftermath of 911 home prices actually increased and it’s worth noting the resilience of our housing market during the 2008 subprime mortgage crisis. The Canadian economy is built upon strong fundamentals – a solid housing market and a stable banking system. However long this Coronavirus crisis lasts remains to be seen but when it’s over there will unquestionably be a great deal of pent up demand.
So Is It Still A Good Time To Sell? Should Buyers Move To The Sidelines?
BUYERS I think this is a time of great opportunity for you especially if you have certainty around your employment situation and are in a financial position that allows you to pursue a property purchase. Many other buyers will be stepping to the sidelines which will give you a definite advantage. There will be competition but it won’t be as intense. There won’t be many open houses but rather what we’ll see is an increase in virtual showings via FaceTime and Videotours. We’re communicating online and are doing digital face to face meetings with our clients. We have specialized clauses to add to our offers to protect our Buyers and Sellers and all transaction paperwork is being done electronically.
SELLERS If you’re looking to cash out, are planning to downsize or have already purchased then my suggestion would be to put your home on the market. Many homes listed over the past week have sold for well over the list price. We have cutting edge digital marketing platforms including 3D floor plans, virtual staging and online walkthrough property tours. The market has been extremely active thus far throughout the outbreak. However if you don’t really need to sell or are troubled by the uncertainty then you are probably best waiting.
There will likely be a standstill in the market and the number of sales will be reduced but when this is all said and done, I expect the market will pick up exactly where it left off. The reality is that we live in a city that is growing exponentially with all the right ingredients to live a good life.
These are unprecedented deeply challenging times. As we practice social distancing and frequent hand washing, while we stay home and sanitize our environments let’s not forget that this too shall pass. Maintaining a positive long term perspective might just keep us out of short term panic.
Stay safe and stay tuned…