The 2020 real estate market began strong, with unit sales in the Peterborough and Kawartha region reporting unit sales up 15.4% from January through March 2020 over the same period in 2019, with prices up 7.4%.
Not surprisingly, this trend came to an abrupt halt in mid-March due to the corona virus. At the end of March, active listings were 8.8% lower than March 2019 in Peterborough as potential sellers withdrew their listings or decided to delay them.
In April, residential listing inventories in the Peterborough area are trending at roughly half of the ten year average, while inventory and sales in the Durham area are down 57%. So far, there has been no corresponding decline in prices. Sales are happening quickly, which could indicate that for current listings, the desire to sell is more serious than usual, as owners are unlikely to be testing the market at this point in time.
While real estate is one of the essential services that continue to operate during the provincial shut down, agents must restrict their activities to supporting the completion of previously agreed deals or those who must buy or sell. There is an emphasis on digital marketing activities, and prospective buyers are asked to take all virtual tours of a listed property before booking a showing. Open Houses are prohibited. There are stringent procedures for showing properties. Those booking in-person views are screened for travel and virus symptoms. Inside the home, visitors wear disposable gloves, and sellers are leaving lights on and doors open to limit contact.
Technology has taken hold inside realtor offices as well, as they abide by the Stay Safe and Stay Home direction. ZOOM conference meetings amongst realtors are now common and offer presentations to clients take place using that technology.
Local realtors Kathie Lycett and Meredith Kennedy, who sits on the Durham Region Association of Realtors, have experienced quick sales and multiple offers on several recent listings, and have seen no downward price pressure in the last month. In fact, some properties have sold at prices above list in less than a week. Despite this apparent demand, realtors are advising clients who don’t need to buy or sell during the state of emergency to hold off until it lifts. The process of closing conditional offers is much longer these days as mortgage lenders, home inspectors and mortgage appraisers are taking extra precautions at this time.
Meredith expects the real estate market to be extremely busy when the industry is allowed to operate more freely. She believes the experience of working at home during the pandemic will push the demand for home office space. For some homeowners, the experience of being isolated at home will have brought into focus any deficiency in the current accommodation and make homeowners eager to find homes that better address their needs.
Kathie agrees. She expects the local market to take off when the market opens up, and expects that demand from the GTA will be higher than ever as people seek homes in the country to avoid the densely populated. After the drop in stock market values, real estate investments might acquire a greater appeal as well.
There may be lots of activity in the months ahead, but in the long run, real estate demand will depend on restoring jobs and income. That will depend on confidence: the kind that drives businesses to invest in people and production and consumers to make big purchases. We know for certain we won’t see business as usual for a while. KG