COVID-19 has significant implications for the national real estate market and the Kawarthas/Haliburton is not immune.
The bigger questions are for how long and to what extent has the market slowed.
A massive disruption to the global economy make it impossible say exactly what the overall impact is on the local market.
We do agree with analysts who suggest buying and selling real estate will operate on a longer consideration-to-purchase
timeline as most take a wait-and-see approach
We are watching following indicators:
- Consumer confidence—will buyers hesitate to purchase a home or cottage during economic instability?
- Government intervention—will billions of dollars in Government stimulus buy the time needed for economy to recover?
- Mortgage rates—how long will the rates be low enough to provide affordability to consumers for large ticket items—homes, cars, etc
- Employment—how long will it take for majority of workers to return to their jobs and will those jobs till be there?
- Inflation-- massive government stimulus could result in a dose of inflation- home values and rents typically increase during times of inflation.
When the economy does start breathing again, our local market has several positive factors going for it:
- pent up demand for housing here and in the GTA
- low interest rates
- demand for recreational property as Canadians become wary of international travel (Staycation for the Nation)
- technological innovations providing work-from-home (or dock) options
- desire for retirees or soon-to-be retirees looking for a lifestyle change outside of urban areas
We agree with Money Sense magazine from a March 25 article:
“However, the reality is that the fundamentals of the market, particularly in the GTA and other major urban centres, don’t change; pent-up buyer demand has been slowing building as the supply of available homes for sale remains scant. Due to the limited inventory available, combined with the population growth in Ontario’s big cities like Toronto, we can expect market activity to resume and recover quickly once we’ve mitigated the health risks from COVID-19 and the financial markets stabilize.” Money Sense—March 25
What does this mean for you?
For buyers, what was your pre-COVID motivation—cottage, upsize, downsize, re-locate?
If COVID didn’t happen, were you going to buy in 2020?
Post-COVID, what will prevent you from continuing with your plan?
If you have been laid off, are uncertain about your job or savings have taken a hit, then perhaps you need to regroup and monitor your financial situation.
If your employment and finances have remained relatively stable, talk to your lender and get pre-approved with potentially lower payments. Review your criteria and keep educated with listings and recent sales.
You may be tempted to wait on the sidelines expecting the market to “crash” and then scoop up a deal of the century.
While prices may drop, we don’t foresee a significant reduction.
Be ready for when listings start coming back to the market.
You may have less competition from other buyers who are hesitant to purchase for the reasons noted above.
For sellers, we ask the same question—what was your pre-COVID motivation?
Liquidity, upsize, downsize, relocate?
Post-COVID, what will prevent you from proceeding? Are you concerned your property value has decreased or not increased to your expectation?
The market may come out of this time with limited inventory and motivated buyers, which will be to your benefit.
Watch market activity in your area for new listings and completed sales.
Remember, as a seller, the ball is in your court.
You ultimately determine what offer you will accept.
To watch our webinar series where we talk to local experts and get their take on these indicators, click here.