The onset of COVID-19 has understandably altered the Q1 trajectory we were enjoying. Average selling prices have come off their March peak, BUT there has been enough activity to keep prices in line with last year’s levels.
Many theories have arisen about the future of real estate in Canada, and more specifically, Toronto. If you had the time to read them all, you’d come away confused and still wouldn’t know what to believe. It’s all conjecture.
I go by what I see and that comes from what the numbers show me. Not just real estate numbers, but also the facts and figures that inform us about employment, financial markets and the economy at large.
Here’s my perspective:
Buyers are still out there. First time and ‘move-ups’ who are gainfully employed are waiting to find their next home. Many are under the impression that they’ll be able to save anywhere from 10-15% compared to pre-COVID-19 prices. This is possible, but a few things have to come together. The seller must be highly motivated, and the buyer’s financing approval is essential. It’s not enough these days to go based on a pre-approval from two months ago. Banks have tightened their lending practices significantly, so please ensure that you have a very recent pre-approval from your financial institution/mortgage broker.
At the very least, there is money to be saved due to the lower cost of borrowing. If this was my mortgage, I’d be taking a 5 year variable at 2.45% right now. Just keep in mind that this is subject to change depending on the prime rate.
If you’re ready to sell a property, Chestnut Park has put together a very good set of protocols to mitigate the risks of Covid-19. This includes getting your place virtually staged, or virtually sketched (ask me about this!), and bringing your home to MLS with a virtual walk-through tour. Once we confirm a prospective buyer is truly motivated and qualified, we then initiate and attend the viewing process to ensure that all participants wear protective equipment including masks, gloves and shoe covers.
The market is still very much alive, it’s just not as frothy as it once was. We also know that when the market activity returns to a more predictable and active level, buyers and sellers will have a completely different mindset. It’s human nature and that’s half the battle!