The Spring Real Estate Market and Covid-19
Last month I wrote about how Coronavirus is affecting the real estate market. In the last article I mostly focused on how Coronavirus is affecting mortgage financing. In this month’s article I think it would be helpful to focus on what’s going on in the real estate market.
Without further ado, here are some ways Covid-19 is affecting the spring real estate market and how you can still buy a home in spite of Covid-19.
No More Open Houses
Real estate agents are considered essential services, so they’re still able to buy and sell houses during the pandemic. That being said, agents are taking precautions to help stop the spread of Covid-19. One of those precautions is to stop holding open houses.
If you’re not familiar, an open house is when a realtor opens up a property to the general public to view. Usually there’s a sign in front of the home, inviting those passing by who are interested to stop inside the home and have a look.
With a lot of people stopping inside the home, this would increase the spread of Covid-19. As such, realtors are no longer holding these open houses until further notice.
Fewer Buyers and Sellers
Since mid-March when most of Canada was put under partial lockdown and non-essential businesses were forced to shut down, there are fewer buyers and sellers in the real estate market. This shouldn’t come as a surprise. But home sales haven’t fallen off a cliff just yet. Home sales are only down by 16 percent in Toronto in the second half of March.
How much the real estate market slows down really depends on how long the current lockdown situation lasts for. If it only goes on for a few weeks, we can probably expect home sales to bounce right back. The summer or fall real estate market could become the new spring real estate market this year. However, if the lockdown lasts for months, this is when home sales activity could continue to fall.
As of the time I’m writing this article, there are fewer buyers and sellers in the real estate market. The buyers and sellers in the market right now are mostly the motivate ones. Maybe you’ve sold your home already and you’re looking to buy a new home. Or maybe you’ve bought a home and you’re looking to sell your home.
If you’re eventually planning to sell your home and you don’t need to sell right now, it probably isn’t the best time to sell. However, if you’re a first-time homebuyer with a stable employment situation not impacted by Covid-19, now can be a good time to buy. Fewer competing homebuyers means that there’s more of an opportunity to negotiate with sellers and get a good deal on a home.
Protecting Yourself When Viewing Homes
Realtors are trying to come up with creative solutions for homebuyers to view homes safely during Covid-19.
The simplest way to safely view a home is to not view it in person. There are other ways to view homes from the safety of home. Technology has made that a lot easier. For example, you could go on a virtual tour. Your realtor could also record a video of the property on WhatsApp for you to view.
If that’s not enough for you, you can still in most cases view properties in person, but your realtor will want to take extra precautions. Those include social distancing and wiping down everything with Lysol wipes.
You don’t even have to meet up in person with your realtor at all if you don’t want to. You can meet virtual over Zoom or speak on the phone. Likewise, all the documents can be signed electronically from the comfort of home.
It’s measures like this that can help keep you safe when viewing homes during Covid-19. Stay safe and healthy, wash your hands and happy home hunting!
What Does This Means for the Real Estate Market?
Mortgage rates are one of the key drivers of the real estate market. With a new more lenient stress test coming into effect for those putting less than 20 percent down coupled with lower mortgage rates, expect a busy spring real estate market this year.
If you’re on the fence about buying a home, now would be a good time to buy. It’s hard to say how long mortgage rates will stay this low.
Link to Previous Blog: How Coronavirus is Affecting the Real Estate Market
Written by Sean Cooper Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. Sean’s helping others with their mortgages as an independent mortgage broker. Get in touch with him for all your mortgage needs. For a free mortgage consultation, email Sean@BurnYourMortgage.ca or call 647–867–3711.