So here is where I get a little irritated: just as much as it’s relatively easy to see through broker sales speak when the topic of real estate prices amid the pandemic are discussed, it’s also easy to see through salacious media headlines and lazy reporting practices when reading so-called analyses of the current state of the market in mainstream media articles.
I don’t sell real estate, but I own a loft in the Toy Factory Lofts in Toronto’s Liberty Village, so the topic of where real estate values are heading now and post pandemic is personal. I am biased in wanting the economy to open back up, a teardown of the foreign buyer’s real estate tax, even higher levels of immigration into this country, keeping mortgage rates low, boosting infrastructure investment in the core, greatly improving the liveability factor (like opening up more streets in the core to foot traffic and cycling, less car traffic), all to boost a marketplace I have a direct interest in.
Still, I will say it, bias aside – the world is not crashing down all around us. Real estate prices are decreasing to 2019 levels, which is not a horrific thing, since the market was scorching hot for the first few months of 2020, according to people who, you know, actually own real estate, are investing millions to develop our core, and buy and sell it for a living.
Earlier this week, Canada’s national housing agency, Canada Mortgage and Housing Corp., predicted home prices could decline by up to 18 per cent when assessing the pandemic’s effect on the housing market. But projections by the big Canadian banks are not so dire – projecting price declines of between five and 10 percent.
All I am saying is look behind the red curtain before you panic. Hold the line on your property over the next few months since there will be no shortage of buyers, propelled by record-low mortgage rates, coming hard at you, looking for deals. Sellers now are like those diminutive NHL wingers, up against the corner glass with the puck, and the buyers are 6-foot-3, 231-pound Milan Lucic, storming in at the puck carrier full steam. If you are not strong you’ll end up a stain on the end glass.
“Offer dates at the moment are not seeming to garner as much as sellers initially are looking for but if the price of the house right is right, just list it accordingly, and most importantly listen to your sales agent and advice of others.”
Selling under duress is another layer to the discussion. For example, business owners under duress due to the pandemic might be forced to fire sell their homes to cash up their business. But I am not sure it’s fair to include those situations when assessing the state of the overall market across Toronto.
That’s why I got doubly irritated when the news broke a few weeks back that the Google parent company Alphabet announced they were pulling the plug on the Sidewalk Labs Smart Cities Project in Toronto’s east end. Maybe I am too touchy with those aforementioned biases, I don’t know. “As unprecedented economic uncertainty has set in around the world and in the Toronto real estate market, it has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan we had developed …,” read part of the statement when the news came down.
No one is going to argue there is economic uncertainty in the world right now, but when you toss “unprecedented uncertainty” in the Toronto real estate market into the equation with a quote like that (especially from the company with the weight that Alphabet has), maybe sidestepping other reported reasons on why the deal in the end didn’t happen (including commentary from credible sources that the project was faced with too many hurdles on the local front and that a great opportunity for the city has been lost), it jolts that “real estate market crash” fear-mongering talking point we see now in some quarters, including the media.
Talk to people who make their living in the real estate industry now – developers, brokers, real estate sales agents, private lenders, institutional banks, builders – for an unvarnished look at the state of the market.
According to a market report from Cameron Miller’s Real Estate that dropped in my mailbox Friday, “low mortgage rates and continued weak inventory should help maintain price stability/growth in the short-term.”
Says sales representative Katherine Minovski from Royal LePage Your Community Realty: “I am seeing more first time home buyers looking for a live/work at home environment, shifting away from smaller confined spaces, into an area where they are in proximity to public parks, outdoor spaces to stretch and get some exercise.
“Prices have come down moderately. There has been no significant shift thus far.”
“Offer dates at the moment are not seeming to garner as much as sellers initially are looking for but if the price of the house is right, just list it accordingly, and most importantly listen to your sales agent and advice of others. Try not to stress and take the situation in stride. Make sure you’ve done some handy work/curb appeal if possible, to make your place is more competitive in the market. Due to smaller amounts of inventory, you’re chances of selling quicker are enhanced.
“The market is also seeing a shift in people coming in from other provinces and from the U.S., typically urban professionals newly recruited or others wanting to escape the environment they are currently in (this includes Canadian citizens abroad), recognizing that Canada’s healthcare system has a lot to offer.”
And this from Andrew Harrild, co-founder, Property.ca Realty Inc.: “At the moment most buyers are sitting on the sidelines, particularly in the luxury market where purchases are not as essential, relative to the first-time buyer market for example.
“There is limited inventory at the moment. Sellers are not selling unless they have to. Prices have come down moderately. There has been no significant shift thus far. It’s quite hard to project where we go from here. It depends on the news, such as a second wave (of the pandemic). Rates will remain low for the foreseeable future and there is still demand out there. I suspect things will remain balanced for the rest of the year, neither a strong buyers’ or sellers’ market. That would be my educated guess. But a week is a long time in real estate.”
And this, from Harvey Kalles, via their blog: “There are some additional indicators we are analyzing to determine the direction of the market, and as noted by Broker Bay, we are seeing week-to-week gains in a number of categories. In the week preceding May 1, requests for showings were up 19%, offer registrations were up 23.4%. New MLS listings were up 8.4%, new exclusive listings were up 16.3%, and solds were up 4.1%.”
These are unprecedented times. It’s easy to traffic in emotion and scare-mongering. Many of us have spent time in quarantine watching too many real estate shows on HGTV which in many cases sets over-exaggerated or unrealistic reality-TV world expectations. It’s easy to panic, whether you are buying or selling. And give your sales rep a break – listen to their counsel. Some measured perspective from people who understand the market is welcome now more than ever.
Top image: Harvey Kalles Real Estate Ltd.