March 31, 2020 | Covid-19
Let’s be very clear: Real estate is nowhere near as essential as the health care workers, cashiers, delivery services, and many more other services deemed essential. Unlike those many services, most of us who work in real estate were not sure if this industry would be considered an essential service. I certainly had my doubts.
As a real estate salesperson, I’m not here to endorse or criticize the position that the Ontario government has made by declaring real estate an essential service. I am, however, here to give you a sense of what that means. Some people are going to interpret real estate as an essential service to mean “business as usual”. It is not. Or at least that’s not the intention. Real estate in the near future won’t function like it did pre Covid-19. Many brokerages have downright banned open houses, and many of the real estate boards have strongly discouraged them. Much of the real estate business has gone online – offers submitted by email, deposits done by wire transfer, and more virtual tours online to reduce the number of on-site visits.
With those salespeople who have properties for sale now, the virtual tour functions as a way to ideally sell a property without having an actual viewing of the house by the buyer. Personally, I’d never buy anything off a virtual tour. I think most people are going to want to see a property in person. Still, if there was ever a time where someone would buy a property off a virtual tour, it would be now.
A number of real estate salespeople I’ve spoken to won’t even go out with clients right now. For those clients who need to buy, some are submitting offers on a property with the condition that they view the house in person. That’s how serious you should be if you want to transact in real estate right now.
Real estate has been declared an essential service because people need somewhere to live. In other words, this provincial government’s decision was made to make sure that deals that have happened in the past, but have not closed, move forward. So, if you bought a condo in early February, but it doesn’t close until the end of April, then you will still have help along the way from your lawyer, your mortgage broker and your real estate salesperson. It also allows buyers, who may have sold their home, to buy/rent another one. Because those buyers would need to find a place to live. It may also include sellers who need to sell their properties for whatever reason. Emphasis on need. You need shelter or your financial well-being is at risk.
This is why real estate is an essential service. So, it’s not business as usual. Ontario remains in a state of emergency. Interactions in real estate will be limited and must comply with current Ontario health standards regarding Covid-19. As with every one else in the world, real estate salespeople should comply with the distancing guidelines set out by the Ontario government. Boards such as RECO (Real Estate Council of Ontario) strongly recommend that we eliminate or significantly reduce the need for in-person interactions. Now there will be a few agents out there who don’t take the guidelines seriously. There are currently no punitive fines if these suggested guidelines are not followed.
In terms of the market, I found the number listings the week of March 23rd to the 29th to be more than I expected as salespeople and sellers tried to rush their listings before Covid-19 sidelined the start of the Spring market. Investors, many of whom had tenants in their properties, were trying to offload their investments. Even multi-million dollar houses were listed. I was shocked. I thought the writing was on the wall two weeks ago, and still the listings came out. According to Broker Bay, even during my perceived rush of listings from March 23rd to the 29th, listing viewings were down by almost 50%. Offer registrations were down almost 50%.
This week starting March 30th, I feel like most of the sellers and their agents got the memo. The number of listings coming out is far less this week than the week before when it was already coming down. This time of year we would traditionally be pouring out listings as the Spring market goes into high gear. This is the time of year that the most listing will come out on the MLS. But I’m glad the market hit the pause button right now. This is a time to do our civic duty to prevent the accelerated spread of the virus that would over-stress the health care system.
In my opinion, if you are a seller, and you would like to sell your property, I would advise waiting until we are on the other side of this pandemic. It is too difficult now to sell a property in Toronto. And if you come out now, it may appear that you must sell. The restrictions currently in place would make selling a property a real challenge. Getting buyers through would be difficult. And even more important, most buyers are not thinking about buying right now. They are self-isolating. There are those buyers out there who have to buy. They need a place to live. So, they will be buying. Still, they are few and far between. I would suggest to any seller now to wait. Don’t list right now. Let’s wait for a better time. For buyers, I would say the same thing. This is not the time to buy real estate, even if you think you may be able to find a deal. Be safe. Stay home.
It is still very difficult to see what the real estate market in Toronto is going to look like at the end of all this. There are just too many unknowns. In time, it may just pick up where it left off in the fast-paced seller’s market of January and February before the big impact of Covid-19 . It may also come back as something very different. We may have long lasting effects on the economy. Commercial real estate may take a harder hit than residential if the pandemic keeps people out of the shops for a long time.
Regardless, the severity and danger of this pandemic will have to subside at some point. I wish we were already there! I miss restaurants. I miss playing and watching soccer. I miss people! I miss going to events, and I need a haircut! And for those of you who feel the pressure of needing to buy and sell sooner rather than later, it may be hard to imagine right now, when real estate will become un-paused. But it will. People will need to buy and sell again. I hope for everyone’s sake that we get there sooner, rather than later, with as many lives spared as possible.